1 Cornell University Library HG277 .G78 1888 + + V.I Final report of ttie Roval Commission app 3 1924 030 184 745 olin Overs The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030184745 GOLD AND SILVER COMMISSION. FINAL EEPORT OP THE ROYAJL COMMISSI OlM J APPOINTED TO INQUIRE INTO THE REGENT CHANGES IN THE RELATIVE VALUES OF THE PRECIOUS METALS; With Minutes of Evidence and Appendixes. pwsieutrt to Ijotf) ^oii^t^ of parliament ip CommanH of l^tv iHajestp* LONDON : PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, BY EYRE AND SPOTTISWOODE, PRINTEES TO THE QXJEEN's MOST EXCELLENT MAJESTY. And to be purchased, either directly or through any Bookseller, from EYEE AND SPOTTISWOODE, East Hakding Street, 1'leet Street, E.G., and 32, Abingdon Street, Westminster, S.W, ; or ADAM AND CHARLES BLACK, 6, North Bridge, Edinburgh ; or HODGES, FIGGIS, & Co., 104, Grafton Street, Dublin. [0,-5512.] Price 2s. 3d. 1888. GOLD AND SILVER COMMISSION. FINAL REPORT OP THE %.,/- a^f^ - jl Y 1 L COMMISSION APPOINTED TO INQUIRE INTO THE EECENT CHANGES IN THE RELATIYE VALUES OE THE PRECIOUS METALS ; With Mij^utes of Evidence a^t> Appendixes. ^ve^mttli to Iiotl^ ^onn» of ^avUammt bs We do further by these Presents authorise and empower you, or any five or more of you, to visit and personally inspect such places in Our United Kingdom as you may deem expedient for the more effectual carrying out of the purposes aforesaid. ^nXi We do by these Presents will and ordain that this Our Commission shall continue in full force and virtue, and that you. Our said Commissioners, or any five or more of you, may from time to time proceed in the execution thereof, and of every matter and thing therein contained, although the same be not continued from time to time by adjournment. 9[u5j We do further ordain that you, or any five or more of you, have liberty to report your proceedings under this Our Commission from time to time, if you shall judge it expedient so to do. 9[n)j Our further will and pleasure is that you do, with as little delay as possible, report to Us, under your hands and seals, or under the hands and seals of any five or more of you, your opinion upon the several matters herein submitted for your consideration. ^ItlJ for the purpose of aiding you in such matters, We hereby appoint Our trusty and well-beloved George Herbert Murray, Esquire, to be Secretary to this Our Commission. Given at Our Court at St. James's, the Twentieth day of September one thousand eight hundred and eighty-six, in the Fiftieth year of Our Reign. By Her Majesty's Command. HENRY MATTHEWS. COMMISSIONS. II. riOTOBIA R. Wl'ttOn'a, by the G-race of Grod of the United Kingdom of Great Britain and Ireland Queen, Defender of the Faith. Co Our right trusty and well-beloved Councillor Farrer, Baron Herschell ; Our right trusty and well-beloved Councillor Joseph Chamberlain ; Our right trusty and well-beloved Councillor Sir Louis Mallet, Knight, Companion of Our Most Honourable Order of the Bath ; Our right trusty and well-beloved Councillor Arthur James Balfour ; Our right trusty and well-beloved Councillor Henry Chaplin ; Our trusty and well-beloved Charles William Fremantle, Esquire (commonly called the Honourable Charles William Fremantle), Companion of Our Most Honourable Order of the Bath ; Our trusty and well-beloved Sir John Lubbock, Baronet ; Our trusty and well-beloved Sir Thomas Henry Farrer, Baronet ; Our trusty and well-beloved David Miller Barbour, Esquire, Companion of Our Mosb Exalted Order of the Star of India ; Our trusty and well-beloved John William Birch, Esquire ; Our trusty and well-beloved Lionel Louis Cohen, Esquire ; Our trusty and well-beloved Leonard Henry Courtney, Esquire ; and Our trusty and well-beloved William Henry Houldsworth, Esquire, greeting. OTfttreaS We did, by Warrant under Our Royal Sign Manual, bearing date the twentieth day of September one thousand eight hundred and eighty-six, authorise and appoint Our right trusty and well-beloved Councillor Arthur James Balfour, Our then Secretary for Scotland, together with the several gentlemen therein mentioned, or any five or more of them, to be Our Commissioners to inquire into the recent changes in the relative values of the precious metals shown by the decrease in the gold price of silver. ^Oh) feuoh) T^tf that We have revoked and determined, and do by these presents revoke and determine, the said Warrant, and every matter and thing therein contained. 9[nlj whereas We have deemed it expedient that a new Commission should issue for the purposes specified in such Warrant of the twentieth day of September one thousand eight hundred and eighty-six. jTurttjtr knOiU pt, that We, reposing great trust and confidence in your abUity and discretion, have appointed, and do by these Presents nominate, constitute, and appoint, you the said Farrer, Baron Herschell ; Joseph Chamberlain ; Sir Louis Mallet ; Arthur James Balfour ; Henry Chaplin ; Charles William Fremantle (com- monly called the Honourable Charles William Fremantle) ; Sir John Lubbock ; Sir Thomas Henry Farrer ; David Miller Barbour ; John William Birch ; Lionel Louis Cohen ; Leonard Henry Courtney ; and William Henry Houldsworth to be Our Commissioners for the purposes of the said inquiry, ^liii We do hereby enjoin you, or any five or more of you, to investigate the causes of the said recent changes in the relative values of the precious metals, and especially to inquire whether the said changes are due — (1.) To the depreciation of silver ; or (2.) To the appreciation of gold ; or (3.) To both these causes. Jf you should find the said changes to be due to the depreciation of silver, you will then inquire whether such depreciation arises from increase of supply or diminution of demand, or from both, and you will endeavour to ascertain the proportions in which these different causes have operated. iff you should find the changes to be due to the appreciation of gold, you will inquire whether the appreciation arises from the diminution of supply or from increase of demand, or from both, and you will endeavour to ascertain the proportions in which these different causes have operated. aS V' COMMISSIONS. ?§at)ing regard to these different causes and their respective effects, you will next inquire what has been the bearing of the changes in the value of the precious metals on the following matters of practical business : — I. India : (a.) Upon the remittances of the Grovernment of India : (1.) For payments on old or fixed contracts. (2.) For payments on new or current contracts. (b.) Upon the persons in India who have to make remittances home in gold. (c.) Upon the producers, merchants, and taxpayers of India. (d.) Upon merchants and manufacturers at home who trade with India. II. The United Kingdom : {a.) Upon the trade of the United Kingdom with other silver-using countries. (b.) Upon the foreign trade of the United Kingdom generally, (c.) Upon the internal trade and industry of the United Kingdom. 5f you should come to the conclusion that the aforesaid changes in the values of the precious metals are causing permanent or important evils or inconveniences to any of the interests above referred to, it will be your duty then to inquire whether it is possible to suggest any remedies within the power of the Legislature or the Grovern- ment, by itself or in concert with other Powers, which would be effectual in removing or palliating the evils or inconveniences thus caused without injustice to other interests, and without causing other evils or inconveniences equally great. 2.a2>tlp, if you are of opinion that this is possible, you will state the precise form which such remedies should take, and the manner in which they should be applied. 9[lltl for the better effecting the purposes of this Our Commission We do by these presents give and grant unto you, or any five or more of you, full power to call before you such persons as you shall judge likely to afford you any information upon the subject of this Our Commission ; and also to call for, have access to, and examine all such books, documents, registers, and records as may afford you the fullest information, on the subject ; and to inquire of and concerning the premises by all other lawful ways and means whatsoever. ^nlj We do further by these Presents authorise and empower you, or any five or more of you, to visit and personally inspect such places in our United Kingdom as you may deem expedient for the more effectual carrying out of the purposes aforesaid. Sintl We do by these Presents will and ordain that this Our Commission shall continue in full force and virtue, and that you, Our said Commissioners, or any five or more of you, may, from time to time, proceed in the execution thereof, and of every matter and thing therein contained, although the same be not continued from time to time by adjournment. 9[tttl We do further ordain that you, or any five or more of you, have liberty to report your proceedings under this Our Commission from time to time, if you shall judge it expedient so to do. ^nH Our further will and pleasure is that you do, with as little delay as possible, report to Us, under your hands and seals, or under the hands and seals of any five or more of you, your opinion upon the several matters herein submitted for your consideration. 9[nlJ for the purpose of aiding you in such matters. We hereby appoint Our trusty and well-beloved George Herbert Murray, Esquire, to be Secretary to this Our Commission. Given at Our Court at St. James's, the Sixth day of May one thousand eight hundred and eighty-seven, in the Fiftieth year of Our Reign. By Her Majesty's Command. HENRY MATTHEWS. COMMISSIONS. Vll III. VICTORIA R. WittOViUf by the Grace of Grod of the United Kingdom of Great Britain and Ireland Queen, Defender of the Faith. Co Our trusty and well-beloved Samuel Montagu, Esquire, greeting : SMfttrtaS We did, by Warrant under Our Royal Sign Manual, bearing date the sixth day of May one thousand eight hundred and eighty- seven, appoint Our right trusty and well-beloved Councillor, Farrer, Baron Herschell, together with the several gentlemen therein mentioned, or any five or more of them, to be Our Commissioners to inquire into the recent changes in the relative values of the precious metals shown by the decrease in the gold price of silver. ^nlj whereas one of Our Commissioners, so appointed, namely, Lionel Louis Cohen, Esquire, has since deceased. ^Ob) fenofaj pt, that We, reposing great confidence in you, do by these Presents appoint you, the said Samuel Montagu, to be one of Our Commissioners for the purpose aforesaid, in the room of the said Lionel Louis Cohen, deceased, in addition to and together with the other Commissioners whom We have already appointed. Given at Our Court at St. James's, the Twenty-sixth day of July one thousand eight hundred and eighty-seven, in the Fifty-first year of Our Reign. By Her Majesty's Command. HENRY MATTHEWS. Note. — The Right Hon. Joseph Chamberlain resigned in September 1887. a4 GOLD AND SILVER COMMISSION. Analysis of Final Report. PART I. Introductobt - . . . Historical survey of relative production and value of gold and silver - Eecent changes in their relative value - Causes or the Eecent Changes 1. Causes affecting silver : supply from the (a.) Increased mines (6.) Sale of demonetised silver (o.) Decreased demand i. Coinage German Section. 1-6 7 8 9 12 13 14 15 16, 17 18-21 22, 23 24-29 30 33 35 ii. Demand for the East (d.) Destruction of bimetallic ratio in the Latin Union Unimportance of increase in supply - Alleged decrease in demand - Effect of the bimetallic ratio II. Causes affecting gold : (o.) Diminished supply (6.) Increased demand for — United States - - - India - . . Europe - - - Industrial purposes - Hoarding, &c. Unimportance of decreased supply Rate of discount lower and more uniform - - - - Total stock actually increased Economies of gold - - - New demands over-estimated Rejoinder to above arguments Fail of gold prices . - . Evidence of index numbers - Silver prices - - - Other investigations into course of prices . - . . Income tax returns - - - Rise in value of gold securities Fall in rate of wages - - - Arguments as to nexus between supply of standard metal and prices Criticism of method of index numbers and conclusions drawn from them - III. Causes affecting both metals - Effects of the Recent Changes : I. Effects of fluctuations in the relative value of gold and silver : (a.) Difficulties connected with ex- change between gold and silver using countries - - 69-74 (6.) Stimulus to trade between silver-using countries them- selves, to the prejudice of gold-using countries - - 75-83 (c.) Discouragement to investment of capital in silver-using countries . - - 84-86 II. Effects of fall in the gold price of 87 silver : Theory that the fall of gold prices is due directly to the fall in the gold price of silver - - 88-92 Effects of a fall in gold prices - 93-96 Disturbance in international trade owing to fall in exchange - - 97-102 III. Effects upon India - - 103-113 A S6136. 36 37 38-40 41 42 44 44 44 44 44 45 46 47-51 52 64 55 56 57 58, 59 60-62 63-67 Remedies proposed foe the Evils above described : I, Bimetallism : Nature of a bimetallic system of currency . . - Effects which would be produced by it if carried out Practicability of carrying it out Consequences of maintaining the status quo - - . II. Other remedies - - - Conclusions as to Causes of the Recent Changes in the Relative Value of the Precious Metals : Changes in supply of and demand for the two metals Fluctuations more severe in recent years - - . Effect of the bimetallic law in Latin Union Alleged appreciation of gold Summary ... the PART II. Conclusions as to the Effects op the Recent Changes in the Relative Value of the Precious Metals: I. Effects of fluctuations : Difficulties arising from exchange between gold and silver using countries - - . . Discouragement to investment of capital in silver- using countries Embarrassment caused to the Govern- ment of India II. Effects of the fall in the gold price of silver : Fall in gold prices due to appreciation of gold - - . . Evidence of index numbers - Rate of wages, retail and other prices Fall not uniform or universal Causes which have contributed to pro- duce a fall - - . . Economies of gold - - - Effects of the great gold discoveries in 1848-50 - - - . Nexus between the level of prices and the standard of value No conclusive evidence of appreciation due to scarcity of gold - - - Further question as to depreciation of silver - - ... Conclusion that fall in value of silver is mainly due to causes affecting silver .... Alleged effect of the fall in the value of silver upon gold prices generally Conclusiuns as to the fall in the prices of commodities Effect of the fall in the value of silver upon India Conclusions as to the Remedies which have been suggested : I. Bimetallism at a ratio approximating to the present market ratio PossibiUty af maintaining fixed ratio - SectiDn. 116 118-155 156-165 167 166 -177 - 179-189 - 190, 191 192-196 197 198 4-12 13 14-16 19-21 22 2S 24 25-31 33 34 36-46 47 48-70 71 73-94 99 100-102 103-107 107 b COMMISSIONS. Section. Extent to which it wo\ild remedy the alleged evils ... 109-112 Effect upon the financial position of the United Kingdom - - 113 Other inconveniences which might be expected to arise - . - 114-118 Apprehensions as to gold disappearing from circulation - - . 119 General conclusion - - - 120 II. Bimetallism at the old ratio of 15^ to 1 - - - .. 121-122 EfPeot of such a measure in the in- terests of the United Kingdom and India .... 123-132 III. Other remedies : Repeal of silver plate duty - - 134 Negotiations with other countries witii a view to a larger coinage of silver ... 135-136 Issue of notes in this country against silver - - - - General conclusion - PART III. Reasons for dissenting from con- clusions arrived at in Part II. Conclusions as to evils arising from the recent changes in the relative value of the precious metals Evils arising from fluctuations in ex- change Evils connected with India Evils arising from fall in exchange Evils arising from fall in gold prices - Effects of the changes in the relative value of the precious metals on cer- tain specified interests Recommendation of bimetallism Section. 137 138 1-3 4-12 6 7 8-9 10-12 13-27 30-35 GOLD AND SILVER COMMISSION. FINAL REPORT. PART I. TO THE QUEEN'S MOST EXCELLENT MAJESTY. May it please Your Majesty, we, the undersigned Commissioners appointed to inquire into the recent changes in the relative values of the precious metals, desire humbly to submit to Your Majesty our final Report upon the several matters which we have been directed to investigate. 2. The recent changes above referred to have been of a twofold character : — Summary of ordsr of I. There have been extensive fluctuations in the relative values of gold and silver. reference. II. There has. been a considerable fall in the gold price of silver. 3. We are directed to inquire whether these changes have been caused by (a) the depreciation of silver, or (&) the appreciation of gold, or (c) a combination of both these causes ; and further whether such depreciation or appreciation has been caused by (a) an increased supply of, or diminished demand for, silver, (b) a diminished supply of, or increased demand for, gold, or (c) a combination of two or more of these causes. 4. We are then directed to investigate the bearing of these changes upon the general interests of the United Kingdom and India ; and finally, if we are satisfied that such changes have been prejudicial to any of those interests, we are to suggest any remedies likely to remove or modify the evils which may be found to exist, without injustice to other interests, and without causing other evils equally great. 5. From the commencement of our inquiry we have been profoundly impressed Difficulty of with the extreme complexity of the questions submitted for our consideration. inquiry. The statistical information relating to the subject is very imperfect, and there is hardly any fact connected with it on which there are not considerable difierences of opinion. When we proceed from facts to inferences these differences naturally become more marked. Even if the facts themselves were admitted, there would still remain an element of doubt caused by the uncertainty as to whether we had taken into consideration all the factors necessary to enable a conclusion to be formed ; and in addition to this, the influences which affect prices and the relative value of the precious metals are so subtle and various, that it is difficult, if not impossible, to assign to each of them its due weight. 6. In view therefore of the difficulties which necessarily attach to such an inquiry. Scheme of we think that the best service which we can render is, in the first instance, to set out Report, at some length the facts to which our attention has been called, with the arguments and opinions expressed on either side, leaving for a later portion of our Report the conclusions at which we have ourselves arrived. We feel that our Report will be of greater value if we are able to present in a concentrated form the nature of the problems involved and their bearing on one another, with the opposing arguments, so as to enable those interested to form their own judgment, than if we limited ourselves to a statement of the conclusions to which our own investigations have led us. We desire to take this opportunity of expressing our ackno-nledgments to the several witnesses who gave evidence before us, and also to those gentlemen in foreign countries who were good enough to forward written answers to our questions. These answers, which were appended to our Second Report, will, we think, be found to contain much valuable information on the siibject of our inquiry. 7. We have already indicated the nature of the changes to which we understand Historical the terms of Your Majesty's Commission to refer, namely (a) the fluctuations which survey of th( have taken place in recent years in the relative values of gold and silver, and (b) the production general tendency of those fluctuations which has been in the direction of a fall in and value of the gold price of silver. - the two But before entering upon an examination of the changes which have occurred in metals, recent years, it may be useful to give a brief sketch of the main facts with regard to A 56136. ^ BOYAI. COMMISSION ON GOLD AND SILVER : the relative value and production of the precious metals in periods anterior to those to which our attention is specially directed. In the history of the production of the precious metals the two principal features are the large discoveries of silver in South America and Mexico which marked the middle of the 16th century, and the large discoveries of gold in California and Australia which marked the middle of the 19th century. Prior to 1545 the average annual production of gold appears to have been (in weight) about one-tenth of the production of silver. From the date of the discovery of the Potosi mines there was a rapid increase in the production of silver, so that by the beginning of the 17th century the relative proportions were about 98 per cent, of silver and 2 per cent, of gold. This proportion gradually altered during the 17th and earlier ' part of the 18th century until in 1750 it 'became 95*5 per cent, of silver to 4-5 per cent, of gold. Por the next 50 years the production of gold fell off relatively to silver, and towards the beginning of this century, the proportion reverted to about 98 per cent, of silver to 2 per cent, of gold. The output of gold then began to increase, at first slowly, and after 1848 more rapidly, until the proportion in 1850-55 was 81*5 per cent, of silver to 18-5 per cent, of gold ; but owing to the alterations in the supply since that date, the proportion is now about 95 • 5 per cent, silver to 4 • 5 per cent. gold. Notwithstanding these variations in the production, the relative value of the two metals, as represented by the gold price of silver; has, at least during the last 200 years, been subject to much less fluctuation. At the beginning of the 16th century the relative value of silver to gold was as 11 to 1. During that century silver depreciated slowly, and during the first half of the 17th century more rapidly, until in 1670 the ratio was about 15 to 1, near which point it remained till shortly after the middle of the 18th century. About this time there was a considerable discovery of gold in Brazil, and the ratio became about 14^ to 1. Silver then again became slightly depreciated, and from the beginning of the present century down to 1873 the ratio did not materially vary from 15-|- to 1. It will thus be seen that from the middle of the 17th century the relative value of the two metals did not vary much more than 3 per cent, in either direction until the recent divergence began to manifest itself in 1873. Extent of g, From a table presented by one of our earliest witnesses, Mr. Pixley, it will be ^•hanees'ia observed that from 1833 to 1872 the annual average price of bar silver on the London their relative market was never lower than 59y%(Z. per oz. nor higher than 62^(i., showing a range value. of 2^d. during the 40 years in question. Mr. Pixley has been good enough to furnish us with a continuation of this table down to the end of 1887, from which it appears that in the years from 1873 to 1887 both inclusive, the highest annual average was 59;^tl (in the first year of the period) and the lowest 44f (^. (in the last year), showing a variation of l^d. The highest actual quotation between 1833 and 1873 was 62fi., in July 1859 ; and the lowest 58^d. in February and March 1833, showing a variation of 4rf. In the later period the highest actual quotation was 59]^d. in February 1873, and the lowest 42d. in July and August 1886, showing a variation of 17\^d. During the current year the price has undergone a further decline, dating from about the end of February. On the 19th of May the quotation was 41|t^., the lowest yet recorded, and for some weeks afterwards it scarcely rose above 4:2d. As will be seen from the dates given the general tendency of the silver market since 1873 has been downwards, there being only three years (1877, 1880, and 1884) in which the average price for the whole year was higher than in the year preceding. Causes of the Fluctuations and the Fall in the G-old Price of Silver. 9. On these facts the question arises whether the wider range of the fluctuations in the later period, and the fall in the gold price of silver are due : (I.) to some change which has affected silver, or (II.) to some change which has affected gold, or (III.) to changes which have operated upon both metals. We will proceed to state the arguments brought forward under each of these heads. I. Causes affecting Silver. Causes 10. The first point to be noticed is the increased supply of silver from the mines, suSr^ especially those of the United States. 11. But before entering upon the statistics relating to the production and consumption of the precious metals, we desire to express our acknowledgments to the recent work FINAL REPORT. — PART I. of Dr. Soetbeer,* which, contains so much valuable information on this and many other points connected with monetary questions. Throughout our Eeport we shall frequently refer on all statistical questions to the figures compiled by Dr. Soetbeer. He explains very fully in all cases the sources of his information and the methods which he has adopted in compiling it ; and we have not met with any other figures which appear more deserving of general acceptance. We have been so much impressed by the value of the work in question, that we have appended a translation of it to this report. We are also indebted for some useful information to the independent inquiries Of Sir Hector Hay and Mr. Pixley on certain branches of the subject. 12. The following table reproduces Dr. Soetbeer's estimate of the Peoduction of Silver since 1851. (a) Increased supply from mines ; Total Production Production in the United States. Period. (Annual Average.) (Annual Average). Weight in Value in Weight in Value in Kilogrammes. £ Sterling. Kilogrammes. £, Sterling. 1851-55 886,115 8,019,350 8,300 75,100 1856-60 904,990 8,235,450 6,200 56,400 1861-65 1,101.150 9,965,400 174,000 1,574,700 1866-70 1,339,085 11,984,800 301,000 2,693,950 1871-75 1,969,425 17,232,450 564,800 4,942,000 1876-80 2,450,252 19,103,100 980,672 7,647,000 1881-85 2,861,709 21,438,000 1,137,478 8,521,450 The weight of silver annually raised from the mines may therefore be said to be at the present time considerably more than double what it was 20 years ago ;■ and it has increased nearly 50 per cent, during the last two quinquennial periods. It should be added that in the above table the value of the silver produced has been estimated according to the actual gold price in the several periods specified. 13. 'In addition to the supply from the mines, the amount of silver placed on the and (6) from market was further increased by that portion of the demonetised Grerman silver which ^^ ^^^ ?* was ofi"ered for sale. The quantity so sold is stated at 3,552,000 kilogrammes, and S^an'^^*^ the amount realised was upwards of 28,000,000Z. silver. The following figures show the proceeds of the sales in each year from 1873 to 1879, and the average price realised. Tear. Proceeds of Sales. Average Price in Pence per oz. Standard. 1873 1874 1875 1876 1877 1878 1879 Total £ 464,834 3,056,783 910,422 4,696,824 11,521,211 6,310,192 1,396,720 d. 58| 57i 52f 50 28,356,986 (c) Decrease( demand. The efi^ect of this supply must, however, have been of a very temporary character ; and little if any silver has been sold by the German Grovernment since 1879. 14. Coupled with this increased supply there has also been, it is alleged, a decrease in the demand, arising from the following causes : (a.) The cessatiou of the free coinage of silver in Grermany, the Latin Union, and Holland ; and (&,) A diminution in the quantity required for transmission to India. 15. The statistics of the coinage throw very little light upon the real extent of the (i.) Coinage demand for new metal. But we append in a footnote such statistics as we have been * Materialien zur Erlaiiterung und Beurteilung der wirtschaftlichen Edelmetallverhaltnisse und der Wahrungsfrage. Berlin, 1886. A. 2 4 ROYAL COMMISSION ON GOLD AND yiLVKK : able to procure of the total coinage of silver in tlie principal countries of the world since 1851.* It will be observed that previous to the period 1881-85 the coinage greatly exceeded the total Droduction. This is due to the large quantity of silver which is re-comed, ana which therefore appears more than once in the returns. At many of _ the Continental mints no record is kept of the origin of the metal coined, and it is therefore impossible to say what proportion of the amount issued by the mints was newly raised from the mines, and what proportion was old silver re-coined. (ii.) Demand lor India. Q. 3030-4, 9131. 10. The diminution in the Indian demand for silver is ascribed primarily to the increase in the amount of the bills drawn by the Secretary of State for India upon the Grovernment of India. The following table gives the net import of silver into India (in tens of rupees), and the amounts received by the Home Government for bills drawn upon India (in sterling) for each year since 1851. official Year. Net Imports of Silver into India. Amounts received by the Home Government for Bills drawn on India. Official Year. Net Imports of Silver into" India. Amounts received by the Home Government for Bills drawn on India. 1850-51 1851-52 1852-53 1853-54 1854-55 Rx. 2,117,225 2,865,357 4,605,024 2,305,744 29,600 £ 3,236,458 2,777,523 3,317,122 3,850,565 3,669,678 1870-71 1871-72 1872-73 1873-74 1874-75 Average - 1875-76 1876-77 1877-78 1878-79 1879-80 Average 1880-81 1881-82 1882-83 1883-84 1884-85 Average 1885-80 1886-87 . 1887-88 Rx. 941,924 6,520,316 71.5,144 2,495,824 4,642,202 £ 8,443,509 10,310,339 13,939,095 13,285,678 10,841,615 Average 2,384,590 3,370,269 3,063,082 11,364,047 1855-56 . 1856-57 1857-58 1858-59 1859-60 8,194,375 11,073,247 12,218,948 7,728,342 11,147,-563 1,484,040 2,819,711 628,499 25,901 4,694 1,555,355 7,198,872 14,676,335 3,970,694 ■ 7,869,742 12,389,613 12,695,799 10,134,455 13,948,565 15,261,810 Average 10,072,495 992,569 7,064,199 12.886,048 5,328,009 9,086,466 12,550,157 12,796,719 10,078,798 797 1,193,729 6,641,576 8,979,521 6,789,473 1860-61 1861-62 1862-63 1863-64 1864-65 3,892,574 5,379,050 7,480,227 6,405,151 7,245,631 15,239,677 18,412,429 15,120,521 Average - . - 9,968,028 4,721,019 17,599,805 13,758,909 1865-66 ] 8,668,673 6,963,103 5,593,962 8,601,022 7,318,144 6,998,899 5,613,746 4,137,285 3,705,741 6,980,122 6,080,527 16,026,268 1866-67 1867-68 1868-69 1869-70 11,606,629 7,155,738 9,218,751 10,292,692 12,136,279 Average 9,428,981 5,487,159 15,358,577 These figures, it is contended, show that, whilst the sterling remittances of the Indian Government have increased, the exports of silver to India have decreased • and this for the following reasons : ' Period. Nominal Value of Silver Coinage. 1851-55 1866-60 1861-65 1866-70 1871-75 1876-80 1881-85 Europe and the United States. £ 22,879,000 «,114,600 35,371,600 58,609,000 69,395,400 86,925,000 56,016,600 British India. £ 22,409,000 48,593,000 4.1,591,000 36,987,000 14,803,000 42,766,000 24,843,000 Total. £ 45,288,000 94,707,500 79,962.600 96,596,000 84,198,400 129,691,000 80,868,600 i'lNAL KEPORT. — PAKT I. (i.) The drawings of the Home Government represent an export from India for ^^®°''.'*' a great portion of which no commercial equivalenb is received, and which r^^" consequently diminishes the purchasing power of the country. (ii.) The bills drawn upon India represent a competing remittance with silver ; and as, owing to the necessities of the case, the bills must be put on the market at whatever price they may fetch, and cannot be held over, except within certain limits, to await the opportunity of a favourable market, the demand for silver as a means of remittance is proportionately reduced, and its price depressed. (iii,) The bills are not placed on the market in the ordinary course of trade arising from the balance of international indebtedness upon the commercial transactions of the two coiintries. They may be offered largely for sale at a time when they are not required for purposes of remittance. This has the effect of lowering their price, and experience shows that the price at which they are sold influences the market for silver. If their price falls the silver market is immediately depressed. 17. The Indian demand for silver has been further affected by other circumstances Other causes independent of the mere increase in the drawings of the Home Government. j d^a'"^ For some years before the commencement of the fall in the value of silver there demand, had been special reasons inducing a flow of that metal to India. This was due mainly to the following causes, (i) the American cotton famine, which stimulated the export of cotton from India, (ii) the construction of the Indian railways and other public works, which necessitated the expenditure of a large amount of capital in that country, and (iii) the mutiny, which compelled the Government to reduce its drawings on India for the time and even to make remittances in silver. It may also be added that the gold discoveries set free for export to the Bast large quantities of silver formerly required for purposes of currency in Europe. All these causes tended to promote the export of silver to India and to diminish the amount of remittances to England. The full effect therefore, even of the comparatively small demands of the Home Government, was scarcely felt until about the year 1871-72 ; and since that date, as will be seen from the table above given, they have largely increased. It has also been said that owing to the uncertain value of silver in recent years, and the tendency of gold to rise in value, the latter metal has taken the place of silver to some extent in India for purposes of hoarding. The figures showing the increased demands for gold are given in § 37. 18. An argument of a somewhat different character ascribes the fall and fluctuations Destruction in the gold price of silver to the removal of an influence which formerly tended to °^ nimetalhc keep its value steady in relation to gold irrespective of the considerations to which ilthi'ijnion we have already alluded. From 1865 to 1873 the mints of the States forming the Latin Union, namely France, Belgium, Italy, Switzerland, and Greece, were ready to convert into coin all silver brought to them, such coin being legal tender to any amount in the several States of the Union, at a fixed ratio with gold. In France a similar law had been in force since 1803 ; and the principle of a legal ratio had been adopted in that country at a much earlier date. The existence of this bimetallic law was, it is contended, sufiicient to maintain a Q- 3467 ; permanent relation between gold and silver, quite independent of the actual quantity '^'^^^• of either metal which was brought for coinage, or raised from the mines. Any person possessing silver, and knowing that by taking it to the mints of those countries he could obtain in return for it coin, which would be there available for the discharge of debts in the proportion of 15^ of silver to 1 of gold, would not part with it for any purpose except at a price approximating to, that ratio. In other words the ratio established by law between the two metals practically controlled and regulated the market ratio. 19. In support of this view, it is pointed out that while the relative value of the Stability of production of the two metals was subject to considerable changes in the first 70 plativevalu years of this century, the extreme variation in their market value scarcely exceeded periods. 3 per cent, in either direction, as shown in § 7 ; while, if the average value ovei' a series of years is taken, the variation is hardly perceptible. 6 EOYAL COMMISSION ON GOLD AND SILVER: These facts are brought out more clearly in the following table compiled from Dr. Soetbeer's estimates of the production of the two metals : — Relative Value of Production and Market Price of Gold and Silver in the under-mentioned periods. Period. Value of Production (Annual Average). Proportion of Silver to Gold. Average Price of Bar Silver. Ratio of Market Value. Silver. Gold. Pence per oz. Silver. Gold. 1801-10 £8,002,600 £2,480,000 3 226 to 1 60A 15-61 to 1 1811-20 4,866,900 1,596,600 3 048 „ 1 60H 15-51 „ 1 1821-30 4,075,900 1,983,100 2 055 „ 1 59U 16-80 „ 1 1831-40 5,278,600 2,830,300 1 865 „ 1 59| 15-76 „ 1 1841-50 6,867,600 7,638,800 899 „ 1 59t% 15-83 „ 1 1851-55 8,'^] 9,300 27,815,400 288 „, 1 61A 15-41 „ 1 1856-60 8,235,400 28,144,900 292 „ 1 61f 15-30 „ 1 1861-65 9,965,400 26,816,300 386 „ 1 611 16-40 „ 1 1866-70 11,984,800 27,206,900 •440 „ 1 60| 15-55 „ 1 Suspension 20. In 1873, however, large quantities of the silver which had been withdrawn and of coinage hj gold in consequence of the monetary changes in Germany were brought to the French UniOT*"" ' ^°^ Belgian mints. Upwards of 6,000,000L worth of silver in France, and upwards of 4,000,000L in Belgium were coined in that year ; and serious apprehensions were excited in both countries. The result was the Convention of January 1874 between the several States of the Latin Union, which limited the coinage of 5-franc pieces in the Union during the year 1874 to the following amounts, namely : France, 60,000,000 francs; Italy, 40,000,000 ; Belgium, 12,000,000 ; and Switzerland, 8,000,000 ; and this limitation was continued (subject to a slight alteration in the amount) until the coinage of full legal tender silver was finally suspended in all the States of the Union in November 1878.* and conse- quent effect upon the value of silver. 21. The efPect of these measures was, it is said, not only to depress the price of silver by liriiiting the actual use of that metal, but to destroy the controlling power formerly exercised by the legal ratio ; and as this change, in itself one of great importance, occurred simultaneously with a great development of silver mining in America, and as the supply of silver relatively to gold has increased, while the demand for it relatively to gold has diminished, the natural result of a fall in the gold price of silver has ensued. The full effect of the change is shown in the following continuation of the table given above. Period. Value of Production (Annual Average). Proportion of Silver to Gold. Average Price of Bar Silver. Ratio of Market Value. 1871-75 1876-80 1881-85 Silver. £17.232,450 19,103,100 21,438,000 Gold. £24,260,300 24,052,200 20,804,900 -710 to 1 -794 „ 1 1-030,, 1 Pence per oz. 59^1, 501 Silver. Gold. 15-97 to 1 17-81 „ 1 18-63 „ 1 Unimpor- tance of amount of annual supply. Q. 3880. It will be observed that in the latter table an increase of 45 per cent, in the ratio of production was met by a diminution of 16 per cent, in the market value ; whilst in the former table the diminution of 86 per cent, in the rg,tio of production between 1801-10 and 1866-70 coincides with a rise in the market value which is scarcely perceptible. 22. It is contended, on the other hand, that the fall in the gold price of silver has not been due to any causes solely or chiefly affecting silver. It is pointed out that the increased supply from the mines is not sufficient to account for a fall of 25 or 30 per cent, in the value of silver as compared with gold, when it is remembered that the anu aal supply of the precious metals is not consumed within a given limit of time, as is the case with most other commodities, but is added to a stock representing many times the annual production. * The nominal value of the subsidiary silver coins, issued from the mints of the Latin Union in the years 1878 to 1887 inclusive vt^as 3,610,328Z. ; but the greater part of this value represents re-coinage. The millssimal fineness of these coins is 835, th.at of the 5-franc pieces being 900, and the former are legal tender only for sums not exceeding 50 francs. i'lNAL KEPOET. — PART I. > The value of the silver produced in the world from the end of the 15th ce^itury to the present time is estimated by Dr. Soetbeer at upwards of 1,951,000,0001 If an allowance be made of one-fourth for loss and wear, the annual supply, even at the present rate, represents an addition of less than 1-|- per cent, to the existing stock. 23. In reply to this it is urged that, owing to the legislative changes described in Greater § 20, the market has, since 1873, become much more sensitive to variations of supply, ^j ^j^g and that in such circumstances an addition of only 1 per cent, to the existing stock market, might produce a result altogether out of proportion to its intrinsic importance. 24. With regard to the alleged decrease in the demand, it is urged that the actual l^^^™**^*^ employment of silver even for purposes of coinage has not diminished since the period (jecreased. when the fall in its value commenced. Any falling off in the quantity required for use in Europe has been more than The Bland counterbalanced by the comparatively new demand created in the United States. Down to the year 1873 there had been free coinage in that country for both gold and silver, and both metals were legal tender at a ratio of 16 to 1, But during the Civil War, and for some years afterwards, the amount of silver coined was very small ; the average value of the coinage in the 10 years ending June 30, 1874, did not amoiant to 2,000,000 dollars a year. By the United States Coinage Act of 1873 the free coinage of silver was. suspended, and gold was made the sole legal tender for sums exceeding 5 dollars. The Law of February 23, 1878 (generally known as the Bland Act, or more correctly the Allison Act), directed the monthly coinage of not less than 2,000,000 or more than 4,000,000 dollars, and made them full legal tender for any amount, in the absence of special stipulation to the contrary. The total coinage under that Act in the 10 years during which it has been in operation is upwards of 300,000,000 dollars, the whole of which practically represents a new demand. It also appears from a table put in by Mr. Griffen that China, which formerly China, exported silver, has since 1875 become an importing country. Q- 597. As regards the alleged falling off in the Indian demand, it is pointed out that the India, diminution in recent years only becomes apparent if they are contrasted with the years 1856-70, a period which is admitted to have been one of abnormal demand in India. In the 20 years preceding 1856, the average net imports of silver into India scarcely exceeded Rx. 1,750,000 a year ; in the 15 years 1871-85 the average was Rx. 5,400,000 ; while in the years 1885-86 to 1887-88 the average rose to Rx. 9,327,000. The figures given in § 16 show that in the period between 1856 and 1870 the net imports of silver into India slightly exceeded the total quantity produced in the world, and the Indian demand must consequently have been largely met from the currencies of the bimetallic countries. The failure of the supply from this source since 1873 is, it is said, sufficient to balance a material increase of production from the mines. 25. The allegations, concerning the influence of the Indian Council bills upon the As to alleged silver market are also disputed. It is said that while the Indian Council bills may have ^p^' °^ an immediate and temporary effect in preventing silver from going to India and in thus ][ji°™*'^ checking the demand for it, yet that in the end it is the value of silver which must ^ ^^ ^-g determine that of the bills ; that if there is a sufficient demand silver will flow to India, whatever the amount of the bills ; that they can only check the export of silver to India in the same way and - to the same extent in and to which they check the export of other goods ; and that as the imports of goods into India have largely increased notwithstanding the increased drawings of the Government, the imports of silver cannot have been seriously checked by those drawings. 26. While therefore it is not denied' by those who take the above view with regard No sufficient to the demand that, but for the monetary changes in the Iiatin Union and Germany, explanation the demand for silver might have been considerably greater than at present, it is faU as has contended that on the whole there is no evidence of any such diminution in the use of taken place, silver as would be sufficient to account for a fall of from 25 to 30 per cent, in its value when compared with the years preceding those changes. 27. It is also argued — {a.) That if the fall in the value of silver was due to some cause affecting that metal ^ot^go^g^to alone, and that consequently it had fallen not only against gold but against commodities, silver-using there would have been an increased export of silver to countries where it is legal countries. A 4 BOYAL COMMISSION ON GOLD AND SILVER : Demand for standard metal must be unlimited. No great increase in supply. Q. 8748-58. tender fcc an unlimited extent, resulting in a general rise of prices and wages in those countries. There is, bowever, no evidence of any sucli phenomenon having taken place. On the contrary, as will be seen from the figures given in §§ 15 and 16, neither the imports of silver into India, nor the coinage of that metal, have shown any tendency to increase in such a manner as would support this theory. {b.) That the demand for a metal which is used as the standard is necessarily unlimited as to quantity in the country in which it is so used ; that the strength of that demand is shown by the quantity of commodities for which a given weight of the metal will exchange ;■ and that as silver will at the present time buy as much produce in India as before, it follows that the allegation of a falling ofF in the Indian demand for silver cannot be maintained. (c.) That silver has not flowed to India in greater quantity because there is no great surplus of silver in the market which could be thus disposed of. The additional amount of silver thrown on the market outside the United States in recent years is shown by the following figures, compiled from Dr. Soetbeer's tables : — Years. 1866-70 1871-75 1876-80 1881-85 1876-85 1871-85 Average Annual Production of Silver outside United States. Net Export from United States (Annual Average). Kilos. 1,038,085 1,404,625 1,469,580 1,724,231 1,596,906 1,532,812 Kilos. 329,888 519,000 221,444 248,111 234,777 329,518 Total (Annual Average). Kilos. 1,367,973 1,923,625 1,691,024 1,972,342 1,831,683 1,862,330 Thus it appears that the average yearly amount of new silver to be absorbed between 1876 and 1885 was actually less than the average of 1871-75, and that the excess amount to be absorbed in the period 1871 to 1885, compared with the average of 1866-70, was only 494,357 kilos, yearly, or less than four and a half millions sterling at the old ratio of 1 to 15^. (d.) That whatever influence the increased drawings of the Indian Council and the absence of any special demands such as those referred to in § 17 may have exercised on the value of silver, an additional demand must have been created in recent years by the development of the country, the increase of population, the construction of railways, the opening of the Suez Canal, the lowering of the cost of transport, and other similar causes. Flow of silver to the East . counteracted by export of goods. Q. 9128. 28. According to another view, the flow of silver to India which might have been expected from the fall in its value in Europe has been counteracted or prevented by the Iieavy fall in the gold prices of many commodities exported from Europe to India which has resulted in increased exports of those commodities, in lieu of silver ; the prices of such commodities having fallen more than the price of silver. The following table in illustration of this argument shows (i) the total imports into India of merchandise and* treasure, (ii) the imports of merchandise only (excluding gold), and (iii) the net imports of silver : — Period. J 866-70 1871-75 1876-80 1881-85 Total Imports, including the Precious Metals. (Annual Average.) Imports of Merchandise only. (Annual Average.) Rx. 47,067,000 39,078,700 47,020,900 63,855,100 Rx. 32,652,200 33,698,700 39,352,600 53,061,600 Imports of Silver. (Annual Average.) Rx. 9,429,200 3,065,500 7,054,200 6,080,500 * The net imports of treasure have been taken. FINAL REPORT. — I'AKT I. it 29. In reply to this argument, it is urged that no diminution m the cost of producing commodities exported from Europe to India could affect the demand for silver in India, so long as that metal would buy as much produce in India as before. 30. The fact of the steadiness in the relation between the two metals during Effect of the the maintenance of the bimetallic system in France is explained as being accidental bimetallic and not necessarily attributable to the working of that system. At the time when the ftccidental. large discoveries of gold might have been expected to destroy the efl&cacy of the q gg3g_ legal ratio. Franco happened to be in possession of a considerable stock of silver, for which, owing to exceptional circumstances, she was able to find a market elsewhere ; and when, in its turn, the production of silver increased, there happened to be a large stock of gold in the country. The causes of the steadiness in the relative value of gold and silver, and the extent to which this steadiness was due to the maintenance of the bimetallic standard in France, will be fully dealt with in another portion of our Report ; and we need not, therefore, at this point state the argument at greater length. II. Causes affecting Gtold. 31. The view which ascribes the divergence in the value of the two metals to Arguments causes primarily affecting silver alone was- that which received the largest amount m favour of of support when the fall in its value as compared with gold was first brought to the ^f g^^^^^ '°° notice of the public. As soon, however, as the corrections suggested by experience came to be applied Q. 10,303-5. to theory, it was suggested that this explanation of the phenomenon was scarcely consistent with some of the known facts of the situation ; and it was then urged, even by those who did not admit the effects ascribed to the dissolution of the bimetallic ratio in the Latin union, or accept the theory of a fall in the value of silver owing to an excessive supply of that metal as compared with the demand, that an explanation should be sought in the hypothesis that the change which had taken place was due to circumstances which had affected gold and not silver. 32. This theory, that gold is scarcer both absolutely and relatively to the work which it has to perform, and that consequently it bears a higher relative value to both com- modities and silver (so far as the latter is to be considered as a commodity) than it did formerly, is supported by its advocate."-: both on a priori grounds and by appeal to facts. 33. It is pointed out in the first place that there has been a diminished supply from Diminished the mines. supply of The following table gives Dr. Soetbeer's estimate of the total production of gold since * ^* ^^^ ' 1851. Total Production. Period. (Annual Average.) Weight in Value in Kilogrammes. £ Sterling. 1S51-.5.5 199,388 1 27,815,400 1856-60 201,750 28,144,900 1861-65 185,057 I 25,816,300 1866-70 195,026 27,206.900 1871-75 173,904 24,260,300 1876-80 172,414 24,052,200 1881-85 149,1,37 20,804,900 These figures, though they do not, of course, pretend to absolute accuracy, are in substantial agreement with those compiled by other authorities. In the evidence given by Sir Hector Hay and Mr. Pixley will be found the results of independent inquiries instituted by them. The actual quantities given by the different authorities for each period do not always coincide ; but the result, so far as it establishes a proporljo late diminution of supply, is practically the same in all cases. 34. Concurrently with this diminished supply it is contended that there has been an Coupled witl increased demand for gold on the part of the United States, Germany, Italy, Holland, increased and the three Scandinavian kingdoms. demand. A. .56136. H 10 ROYAL COMMISSION ON GOLD AND SILVER ; 35. Of the above-mentioned countries the demand for the United States is un- doubtedly the most important. Extent and eflfect of the United demand. I^s extent will be best understood from the following figures showing — The Consumption of Gtold m the United States. Indian demand. Period. Annual Average Value of Actual Consumption. Home Production. Net Exports. Net Imports. 1866-70 1871-75 1876-80 1881-85 £ 10,602,000 8,300,200 8,916,840 6,708,080 £ 8,069,000 8,594,000 £ 2,468,000 4,425,000 £ 2,533,000 - 293,Si00 11,384,840 11,133,080 From these figures it appears that during the 10 years 1866-75, the United States absorbed a total value of 11,196,000L, and during the 10 years 1876-85 a total value of 112,589,600L The United States first began to draw gold from Europe in 1878, and since that date the imports of gold have exceeded the exports in every year except one. This demand was originally created by the anticipated resumption of specie pay- ments on the 1st January 1879 ; and its maintenance is due both to the very rapid growth of the trade and population of the country in recent years, and to the increasing demand for gold for industrial and currency purposes. A large amount is also accumulating in the Treasury, owing to the growing surplus of revenue over expendi- ture, and the protective system of the country, which, it is said, leads to an export of gold thither in lieu of commodities. This large accumulation of gold in the Treasury is a distinctive feature in the United States. In other countries the store of gold constitutes the reserve of the principal banks, and is the foundation on which the commerce ot those countries is based. In the United States, however, the amount held by the Treasury, except so far as it is represented by notes or gold certificates, is practically hoarded and withdrawn from commercial use altogether. 36. The extent of this demand for the United States in its effect upon the supply available for other countries is further illustrated by the following table showing the Available Supply of Gold in Countries outside the United States. Period. Annual Average Value of the Production outside the United States. Net Exports from ' Net Imports to the the United Stutes. United States. Total Supply. 1866-70 1871-75 1876-80 1881-85 £ 16,604,900 15,960,100 15,135,360 14,096,820 £ 8,069,000 8,594,000 2,468,000 4,425,000 £ 24,67;!,90u 24,554,100 12,667,360 !),6~],,s20 37. There was also m slight increase between 1880 and 1885 in the Indian demand for gold, which however has not been maintained since that date. Period. 1866-70 1871-75 1876-80 1881-85 1886-88 Net Imports of Gold into India. Annual Average Value. Rx. 4,985,528 2,330,080 614,988 4,712,899 2,643,057 FINAL ItEL'Oiri'. -I'AUT I. 11 If then wc deduct from the total production the quantities absorbed by India and the United States we arrive at the following results : — Period. Total Production of the World. Absorbed by India and the United States. Surplus. 186(i-75 1876-85 £ 257,336,000 224,285,000 £ 47,771,000 139,229,000 209,565,000 85,056,000 38. The demand in Germany has arisen from the substitution of a gold for a silver European standard simultaneously with the withdrawal of a considerable quantity of notes of demand, small denominations, necessitating a corresponding addition to the metallic circulation. The gold coinage was first authorised by a law of December 1871, but the single Germany, gold standard was not actually introduced until July 1873 by a law which also prohibited the issue by the Imperial Bank of Grermany of notes of a less value than 100 marks. The amount of gold actually coined by Grermany aince 1871 is upwards of 98,000,000^.; and of this sum about 80,000,000L is estimated to represent the new demand. Q. 498. The greater portion of this coinage (upwards of 50,000,000/!.) was executed in the years 1872 and 187S ; and the bulk of the metal required was drawn either directly Q. 1354, or indirectly from France. The following figures will afibrd some indication of the movement of gold towards Germany during those years. Value of Gold Bullion and Specie exported to Germany in the under-mentioned Tears. Year. Great Britain. France. Belgium. Total. 1871 IH72 1873 Total - £ 8,488,000 8,152,000 7,263,000 £ 4,585,000 353,000 7,040,000 £ 1,776,000 414,000 *4 1,323,000 £ 14,849,000 8,919,000 55,626,000 23,903,000 11,978,000 43,513,000 79,394,000 These figures are taken from the trade returns of the three countries above men- tioned, the German returns themselves being obviously incomplete ; but it must be observed that in nearly all countries the returns of the import and export of the precious metals are more liable to error than is the case with other commodities ; and we do not therefore think that these figures afford much indication of the real facts of the case. 39. Another demand was created by the action of Italy in 1881-83, with the Italy, view of resuming specie payments. For this purpose a loan was raised of 16,000,000L, q. 522. about 12,000,000Z. of which was drawn from countries outside Italy ; but the gold coinage actually executed in Italy since 1881 does not appear to have exceeded 6,500,000L In the Netherlands a bimetallic system of currency had been in force until 1847, Holland, when a single silver standard was introduced. The coinage of silver was, however, temporarily suspended for short periods between 1872 and 1875. By a law of 6th June 1875, the adoption of a gold coinage was authorised, and the coinage of silver was permanently suspended ; the silver, however, still remaining legal tender at its nominal value. The gold coinage since 1875 has amounted to about 6,000,000Z. By a convention originally made in 1872. but not finally ratified by all the parbies Scandinavian until 1876, the three Scandinavian kingdoms, Norway, Sweden, and Denmark, adopted kingdoms, a common system of currency based on the single gold standard ; that previously in use having been silver. The amount of gold coined in the three countries since 1872 is about 7,000,000Z. * Entered in the returns as " in transit from France." B 2 12 ROYAL COMMISSIOJV ON (iOLD AND I Demand for industrial purposes. Q. 371,380. Q. 388, 607, 608, 40. It should, however, be remembered that all the demands for the several European countries above mentioned must not be considered as having had a cumulative eflfect, some of the gold required having been only temporarily withdrawn from other countries to which it afterwards returned in the ordinary course of trade. In this respect the European countries stand on a different footing from the United States and India, which have on balance absorbed gold almost continuously throughout the last 10 years. 41. In addition to the above demands, which relate chiefly to the use of gold for monetary purposes, allegations are made that the amount required for industrial purposes has increased ; but very little evidence has been adduced in support of this view. Any statistics on the subject must necessarily be of a very uncertain character, as there are no means of ascertaining either the quantities actually used for such purposes or the extent to which the supply is obtained from new metal or from metal previously used, or the extent to which metal previously used is melted down and re-coined. Dr. Soetbeer's estimate of the total quantity of gold annually required for industrial purposes at the present time (after deducting the old material used) is 90,000 kilo- grammes, equivalent to about 12,250,000L But this estimate is considered by some authorities as too high. Sir Hector Hay's estimate of the amount used in this country is about 2,300,000^., of which about 1,750,000L is fi'om new material. The only country in which any systematic attempt appears .to have been made to estimate the quantity used over a series of years is the United States. The inquiries of the Director of the Mint in that country have resulted in the following figures : — Value of Gold used for Industrial Purposes in the United States in the under- mentioned Years. Increased tendency to hoard or accumulate. Q. 1461, 1462. Q. 7709. From Coin and Year. Total Consumption. other old Material. From Bars. £ £ £ 1880 1,799,000 651,000 1,148,000 1881 2,101,000 816,000 1,285,000 1883 3,012,000 1,525,000 1,487,000 1885 2,323,000 1,024,000 1,299,000 None of the estimates, however, throw much light on the increase or decrease of the use of gold in recent years. 42. It is further stated that the unsettled relation which has subsisted between the two metals since 1873, as well as other causes, have produced a tendency on the part of both individuals and Governments to accumulate or hoard gold rather than silver. The facts on this point which relate to India have been noticed above in S 37 It is also known that the German Government has a sum of about 6 000 0001. in gold stored in the fortress of Spandau, which is practically withdrawn from the stock available for commercial or industrial purposes.* Further evidence pointing in the same direction may be found in Dr. Soetbeer's estimate of the value of the gold contained in the national treasuries and the principal banks of the world, which gives the following figures : — J^ P £ 1877 - - . . . 144,500,000 1878 - - - - 142,500,000 J879 - - - - - 175,000,000 |°80 - - - _ 189,500,000 }°81 - - - - . 195,000,000 1882 - - . _ 903,500,000 1883 - - - . . 230,000,000 1884 - - . . 234,000,000 ' 1885 - - _ . . 252,000,000 * It should, however, be noted that " Reichskassenscheine " or Treasury Notes have been issued by the Government to the extent of about 140,000,000 marks, which may lie considered as to some extent secured by the reserve above mentioned. PINAL REPORT.— PART I. 13 It is also said that the State banks on the Continent generally facilitate the Difficulty of importation of gold, but place difficulties in the way of its exportation. For obtaining example, it has been remai'ked that the Imperial Bank of Germany has at times c°Qtj^°jit^ attracted gold by making advances for short periods on exceptional terms on q" 1444-6. condition that gold is imported for the purpose of repaying such advances. On the other hand pressure is brought to bear on merchants and bankers to prevent the exportation of gold from that country. The Bank of France, while objecting to part with gold except in small quantities for internal purposes, charges a premium on bar gold when required for export. 43. The above are all the arguments which we think it necessary to notice in support of the alleged appreciation of gold as deduced from the facts relating to the supply of and the demand for that metal. 44. On the other hand it is contended— (a.) That, while the supply of gold from the mines has undoubtedly fallen off, the effect of such a diminution has been inappreciable, owing (as was pointed out with regard to silver in § 22) to the magnitude of the stock already in existence. Dr. Soetbeer's estimate of the production of gold since the end of the 15th century is 1,553,415,000L : and an annual supply of 20,000,000L would consequently be aboiit l^ per cent, on that stock, while the actual diminution in the supply which has taken place during the last 15 years would only amount to |- per cent, per annum. (b.) That the insignificance of this diminution is demonstrated by the fact that, for all purposes for which it is required, gold is as plentiful as ever. In support of this view the figures given in § 42 are quoted. And it is pointed out that the allegation noticed in § 41 with regard to the increased use of gold for industrial purposes would, if true, tend to show that the demand for gold for monetary purposes was adequately met. (c.) That the rate of discount has been both lower and less subject to fluctuation than in previous periods. The rate of discount, it is said, is conclusive evidence as to the extent of the supply of gold for monetary purposes, for it is the price paid for the temporary command of that metal, or at any rate for the command of something which depends upon and varies directly with the supply of the metal, and must consequently be an accurate indication of the relation subsisting between the demand for and supply of gold at the time when it is fixed. In further illustration of this view, it is pointed out that any diminution of the bank reserves below their normal limit is almost invariably followed by a rise in the rate of discount, which in its turn tends to replenish the reserves; while any material increase in the reserves is followed by a lowering of the rate, and that these results are produced with such uniformity as to establish a causal connexion between movements in the available supply of gold and in the rate of discount. The average rate of discount at the Banks of England, France, and Grermany, with the number of changes of the rate, in quinquennial periods from 1861 to 1885, is as follows : — Insignifl' cance of decrease in supply. Q. 7448. (I 7709. Bate of dis- count lower and more uniform. Q. 7774-93. Bank of England. Bank of France. Bank of Germany. Period. Average Kate per Cent. Total Number of Changes. Average Rate per Cent. Total Number of Changes. Average Bate per Cent. Total Number of Changes. 1861-65 - 1866-70 - 1871-75 1876-80 - 1881-85 - 4-90 3-62 3-75 2-87 3-43 59 36 73 29 32 4-83 3-07 4-86 2-65 3-34 36 12 8 7 6 4-47 4-67 4-50 4-17 4-23 12 16 17 27 12 From these figures it is inferred that less difficulty has been found in recent years in maintaining and replenishing the stock of gold in the reserves of the principal banks ; and it is only through the state of these reserves that the supply of gold for monetary purposes produces any effect upon the transactions of commerce. (d.) That even, admitting the increased demand for gold in some countries, and the Total stock decrease in the annual supply from the mines, the total mass available for commercial increased, purposes (which as stated in («-.) is the more important consideration) has not diffefentlr diminished but increased. distributed. B 3 14 koval ;'.()MMISSI0X <»>; (.old and .silver: Increased oeononiy of gold. Q. 1336-40; 6648-52 ; 7736-41 ; 7799-7802. New (lemiinds exaggerated. Q. 1354. Visible sup- ply no test of appre- ciation. Q. 6366-9. All that can have been effected by the increased demand is a different distribution of the stock of gold from that which formerly obtained ; and the proportion in which the stock is distributed among the different countries of the world is immaterial. Each country will, so far as its financial position allows, secure such a share of the stock as is required by, and is appropriate to, its individual necessities. However great that share may be in one country, and however little in another, the general level of prices over the whole area and in the long run will be uniform. (e.) That from a variety of causes, some of which have only recently begun to operate, and others of which have operated with greater effect since 1873 than before, the quantity of gold required for the commercial transactions of the world has diminished, and what is actually required is enabled to do its work more rapidly and more economically. It cannot, therefore, be said that, for practical purposes, the available supply of gold has been diminished. Among the causes which are said to have contributed to this increased economy in the use of gold may be mentioned the great increase in the number of branch banks in this country, the larger use of cheques, postal orders, and other instruments of credit, the creation of telegraphic transfers, and the extension of banking accommo- dation and of the clearing system on the Continent. (/.) That the effect of the new demands referred to in §§ 34-39 upon the available stock of gold has been much exaggerated. The real demand has been less than the ■apparent demand owing to the consumption being, in some cases, counted twice over. Grold having been coined in one country is exported to another and appears in the returns of both. Further, it is stated that a considerable proportion of the gold required for the fresh demands has been taken from hoards (especially in Prance) and other sources where it was practically withdrawn from use. 45. On the other side it is rejoined — (a.) That neither the apparent abundance of gold, nor its increased use for other than monetary purposes, can of themselves indicate that gold has not appreciated, since the prices of commodities must always accommodate themselves to the supply of gold. It is of the essence of a monetary standard that it should absorb all the metal of the standard which is not required for other purposes. The demand for the metal of the standard is therefore necessarily unlimited ; the strength of that demand or the value of the metal, for the time being, is represented by the general level of prices. Whatever quantity of the metal is required at that value for non-monetary purposes is absorbed, and the balance is taken into the currency. Any fluctuation in the demand for the metal will be exhibited in the increase or decrease of its purchasing power ; and as the purchasing power of gold has increased in recent vears, it cannot be said that the demand for gold for currency purposes is satisfied. The increased use of gold for non-monetary purposes does not prove that o-old has not appreciated, inasmuch as its use for those purposes is affected by increas'- of population, of wealth, and especially of savings, as well as by fashion, and its increase m value relatively to silver may lead to its being hoarded in increasing quantities. (6.) That the supply of gold in such institutions as banks and national treasuries no test of its scarceness. IS The reserves in banks are affected by depending upon the supply of the metal. many other An increase considerations besides the reserves tho se m may simply represent an increased tendency to hoard, with the effect of increasing the demand £7 and consequently the value of gold; or it may be due to an increase in the amount of business, or to a change m the mode of doing business , through falling prices, to check enterprise and speculation, the demand for Q. 5352-6. capital would naturally be diminished, and the rate of discount would fall with it. The rate of discount in fact depends largely upon the briskness or slackness of business. So far, therefore, from a low or uniform rate of discount proving the existence of a adequate supply of gold, it is not only consistent with, but the necessary concomitant of, a scarcity of that metal. Experience further shows that during periods when both the production and the stock of gold were large, the rate of discount was frequently very high. (cL) That the chief demand for gold in recent years has come from the United States, and the effects of a reduced supply of gold, relatively to the wants of the community, would ordinarily be experienced in the first instance in that country. If such want of gold caused prices to fall in the United States, or kept them lower than they would otherwise have been, the influence on prices would be transmitted to all other countries with which the United States had commercial intercourse, through the operations of the international trade. (e.) That there is no foundation for the assertion that an increased demand for gold merely causes a different distribution of the metal, and has' no effect upon its value. If a change in the distribution of gold among the different countries of the world is ofthemotal immaterial, it is impossible to explain why so much trouble is taken to prevent gold q 3932-4 from flowing from one country to another. A proper distribution of the precious metals, so far from being immaterial, is essential to the efficient performance of their functions ; and gold if it is hoarded or accumulated beyond the point necessary for the transaction of current business and the maintenance of credit (as would now appear to be the case in many countries) is practically withdrawn from use. (/.) That the effect of the methods for economising gold referred to in the preceding Alleged paragraph, so far as they relate to a period since 1873, has been much exaggerated. economies Mr. Bagehot stated, in 1873, that the period from 1844 had "been almost marvellous of gold, in its banking development, " and there is no evidence of any remarkable progress since q. 3740. that time. The arguments drawn from the extension of the use of postal notes, and from the increase in the number of small cheques, fail to indicate the amount of the economy of gold effected in this way, and no attempt is made to show how far such economy of gold (if any) is balanced by such causes as the increased demand for gold due to increase of population, or by the growing tendency to pay cash instead of running up bills. There has, no doubt, been a large increase in the number of postal notes issued yearly, but the economy of gold effected by this means depends not on the aggregate amount of such notes issued in a year, but on the average number outstanding at one time. The number outstanding at one time represents about 270,000L ; of this about 70,000Z. represents sums so small that they could never have been paid in gold. The balance (200,000L) represents the maximum possible economy of gold, but the real economy is evidently much less, as postal notes have, to a large extent, merely taken the place of postal money orders, and probably other means of remittance. '(g.) That the inconclusive nature of the evidence respecting the alleged economy in the use of gold, founded upon the development of credit and the extension of banking accommodation, is shown by the fact that the country which has absorbed most gold in recent years is the United States of America, though there is no country in which so oreat a development of credit and banking has taken place. B 4 16 ROTAL COMMISSION ON OOLD AND SILVER : Hoarding (h.) That there is no evidence as to the amount of gold which was drawn from hoards in order to satisfy the new demands ; that it is unlikely that the habit of hoarding was finally abandoned in 1873 ; and that the amount then withdrawn has probably since been replaced. Arguments drawn from 46. Those who maintain the view that gold has become scarce in proportion to the work which it has to perform, further adduce a class of arguments, drawn, not from fall of prices ^]^q f^cts relating to the supply of and demand for the metal, but from the quantity of other commodities for which it will exchange. The prices of commodities are, it is said, the value of those commodities expressed in terms of gold ; they represent the relation for the time being between gold on the one hand and commodities on the other; and that relation will be determined from time to time by the quantity of commodities offered on the market in exchange for gold, and the quantity of gold offered in exchange for commodities. A fall of gold prices is therefore synonymous with a scarcity of gold. Starting from these premises, it is urged that there has been a general fall of prices measured in gold, while prices in countries where a silver standard prevails have not risen, and have in some cases even fallen. Q. 5181-5. Index numbers. 47. The principal evidence adduced in support of this view is that derived from the system of index numbers. This method of comparing the general level of prices in different periods is obtained in the following manner : — Certain articles are selected for the purpose of comparison ; the price of each at a given date is represented by a standard number — say 100 ; the variations in price in each subsequent year are noted, and a proportionate addition to or subtraction from the standard number is made. By adding together the numbers so obtained a general view of the rise or fall of prices is obtained. 48. Several tables of prices constructed on this principle have been compiled in recent years. The best known are : — (i.) The table annually published by the '• Economist" newspaper, which o-ives the wholesale prices of 22 of the principal articles on the London market, the basis of comparison being the average prices for those articles in the fi-\re years 1845-50. (ii.) A table prepared by Mr. A. Sauerbeck, which deals with the London prices of 45 wholesale commodities, the period taken as the basis of comparison being the 10 years 1867-77, and his record of prices extending as far back as 1837. (iii.) Tables prepared by Mr. Inglis Palgrave for the Royal Commission on the Depression of Trade, taking the period 1865-69 as the basis of comparison. These tables deal not only with prices in England, ^but in Prance, and India ;" and in framing them regard has been had to the relative importance of the several articles included in the list. (iv.) Dr. Soetbeer's tables, which take the period 1847-50 as the basis of comparison and deal with the prices of 100 articles on the Hamburg market, and with 14 of the principal articles exported from the United Kingdom. (v.) Tables prepared by Mr. Giffen from the Trade Returns of the United Kino-dom gomg back to 1840 m the case of exports and to 1854 in the case of imports! Diagram showing the course of prices from is 1851 185Z 1853 1854- 1865 185G 1851 W58 1853 1860 18G^ 186Z 1863 1864- 1865 1866 1861 1868 1869 1870 1811 187Z 1873 1814- 1875 1816 18 z 110 8 e -f 2 160 8 6 Z 160 8 e 4- Z 140 8 G 4- Z 160 8 6 4- Z no 8 6 4- Z 110 8 6 4 Z 100 8 e 4 Z 90 8 6 4- 2 80 8 6 4 % 70 8 i\z \ \ • \ 1 \ 1 V ( 1 . % 1 1 *■• 1 ; J 1 '. 1 ! 1 ! 1 ! 1 ! t 1 It ^8 : y^ X" ■v. V / K t \ . 1 * ! » • 1 / '•<, \ < * J '; L_ t 1 / *' \ \ / ^ \ \ 1 y \ \ t * \ *v. v^ J ( \ 5 ; # /\ f \ \ y 1 t * \ * / \ /' 1 M r \ ^i^ / V. \ \ / / / ^.^ / /', i ' \ < .-• • " "" '' ' / ^' \ / V S ^ ^ —— f J '■' ■ i \r / ■ \ \ '\ s ••. ^•- ••* * / ,' \ ' / V N^ r s t / r » » /f / / ^ >«: • * 1 / * /' ^ 111 / * <» « i y * ^ « t / \ (1) * * -♦ / . ^ \ \ / * V t \ \ 1 y / \ ^ ^ \ \ % \ / * \ ^ f?-) ^ <^ / ^ / \ y > -^ V ^ / * \ t i '•/ J / \ J -^ --, / * / 4 / \ v\ ,»• .-■ .-' / \ / « * 1 "• ■V. •^N / * \ «•■' I f \ / » \ / "^ ■-^ ^ / \ / * 1 f / \ \ V ,''' / \ --" *•"" # / / y (^) / 1861 185Z 1833 1864 18S6 1866 1867 186S I860 I860 1861. isez 1863 1864 1865 1866 1867 1868 1869 1870 1871 18 7 Z i&7a 1874- 1815 1876 181 e^. (// JEourLorrvist " 3xdea^JVa7n2>er^, 100 =^Avenag& of 1845 ~50 . {3} ,. „ „ , 100 ^Avera^& of 1865-9 . ' {Mrj^'aZ^rai^ey's ojv^cirLgernjtrtt siMsiffracng ix) ecc£lv ocrtute, its -reJMjtive^ impantowvoe^ ^ , fZ} D r Soeibeer^ 's , lTi/£ea> JVizm^en , WO = Avenou { 4-) M'^ Saxier-hecJoh IruLeayW^tcmJber J 1C0=Aver-a^ RAM SHOWING THE COURSE OF PRICES FROM 1851-1888 . 861 18GZ ises 18GA 1865 186G 1861 W68 18G9 1810 1811 187Z 1873 1874- 1875 1876 1811 1878 ma 188C 1881 188Z 1883 1884- 188S 1686 1887 1888 [ r % I I \ 170 - \ \ 8 1 \ G 1 \ 4- 1 f V ?, f *■• /W 1 1 1 * if? I 1 £ 1 B 4 t 1 Z L.. f,W 8 1 t C t 4 1 Z 1 140 1 1 108 H i » L^ V Ns, a / t / \ 4- i / » / * ■*•. y V % f 1 > f * ♦ ^ \ N im y \ \ / \ t *V V. 8 / f \ \ y / 1 * \ \ k G * A r \ y / V. \ \ / /^ 1 •^^ \ 4 / ^ \ A *N, <:^ -^^ .^ f ^ .-- \ \ --■ I / 'C, ***• — • • * \ t \ \ s. / ^ r^ \ s / s i V \ y \ -^ \ \ f \ a 1 , ; \ 4- t 1 1 1 ( 1 \ \ \ 1 ^/' ^ ,;;/ k 1 I 1 ' \ f' ••, \ \ 110 y # » t i i ^ \ 1 / \ / ^' \ \ \ \ 8 ('^ % % / \ / » X ', ^ \ \ C e y \ t i 1 * * V \ 1 \ \ \ 4 ^ ^ \ \ » \ \ '. f L \ ^ -«, Z > ^ \ V I— *•" •"■ \ / ^ 8 \ V / N s '■ -•' fi s v y S -^ ^ 4 > / •v. ^ % \ \ 80 \ \ * "» ff \ d \ '*> 4- S * ?, .,. ^^ V 1(1 , S — — *- 8 idei 186% ■1863 186^ 1SG5 186G 1867 1868 18G9 1810 1871 181 Z 1S73 187^ 181S 76'76' M77 1878 1819 1880 1881 188Z W83 1884- 1886 1886 1887 1888 , -50. fZ) D "T Soetheer^ 's , Iruleay 2Vtz7nJ>en , 100 = {4-) M"^ SaJzer-iecToh IruleayJiTunvhe^, WO Avera^oof 184^7-50 . ■■ Average of 1867 - 77 . D»NCERFiELD LiTH 22. Bedford S" Covent Garoch /704^.fAs FINAL REPORT. — PART I. 17 49. The following statement shows in a concise form the results arrived at by these several methods : — 1. 2. 3. 4. 5. 6. •J Period. " Economist." 22 Wholesale Commodities ill Knijland. 100 = Average of 184.5-50. Dr. Soetbeer. 100 Hamourg Articles and 14 Articles of British Export. 100 = Average of 1S47-50. " Economist." (Similar to 1, >iit re-iirranged on basis of 100 = Average of 1865-69.) Mr. Palgrave. (Similar to 1 , but assigning to each article its relative importance.) 100 = Average of 1865-69. Mr. Sauerbeck. 45 English Prices. 100 = Average of 1867-77. Mr. Giffen. Prices of British Exports. 100 = Prices of 18.54. Mr. Giffen. Prices of British Imports. 1 00= Prices of 1854. 1851 104 100 75 1852 — 102 — — 78 — — 1853 Ill 114 — — 95 — — 1854 ~'~ 121 — ■ — 102 100 100 1855 124 — — 101 97 105 1856 123 __ 101 1857 136 130 — -^ 105 103 110 1858 118 114 — — . 91 — — 1859 115 116 — 94 102 99 1860 122 121 — — 99 — — 1861 123 ' 118 __ 98 __ 1862 130 123 — — 101 — — 1863 138 125 — 103 — — 1854 172 129 — — 105 — 1865 162 123 — 108 101 137 118 1866 16] 126 111 102 _ ]^:67 137 124 — 99 100 — — i868 122 122 — 93 99 119 108 1869 121 123 — 89 98 — 1870 122 123 91 90 96 — — 1871 118 127 90 93 100 ___ 1872 129 136 97 100 109 — — 1873 134 138 102 104 111 132 107 1874 131 136 100 108 102 • — — 1875 126 130 95 97 96 114 101 1876 123 128 93 99 95 105 96 1877 124 128 94 100 94 101 99 1878 115 121 87 95 87 — 92 1879 100 117 76 82 83 92 88 1880 115 122 87 89 88 — 93 1881 108 121 81 93 85 92 92 1882 111 122 83 87 84 — — 1883 107 122 79 88 82 92 89 1884 100 114 75 80 76 90 84 1885 95 109 70 76 72 87 79 1886 92 104 69 73 69 82 74 1887 9't 103 70 73 68 — — 1888 101 75 We also annex a diagram showing a comparison of the results arrived at in columns 1, 2, 4, and 5. 50. To the above may be added the following re- arrangement of Mr. Sauerbeck's figures, showing the average prices for each period of 10 years since 1837, by which method the general tendency of the movement is more readily seen, and thw effect of teniporary fluctuations is eliminated. A 56136. 18 ROYAL COMMISSION OlS GOLD AND SILVEE : Average Index Nos. of Prices for 10 years. Steadiness of silver prices. Q. 768 ; 1678; 2419; 8747. Professor ITicholson's mode of measuring prices. Q, 5435-44. Stationary chai'acter of income tax returns. 1837-46 1838-47 1839-48 1840-49 1841-50 1842-51 1843-52 1844-53 184.'5-54 1846-55 1847-56 1848-57 1849-58 1850-59 1851-60 1852-61 1853-62 1854-63 1855-64 1856-65 1857-66 93 93 91 88 86 83 82 83 85 86 88 89 90 92 94 96 99 100 100 100 100 1858-67 - 99 1859-68 - 100 1860-69 - 101 1861-70 - - 100 1862-71 - 100 1863-72 - - 101 1864-73 - 102 1865-74 . - 102 1866-75 - 101 1867-76 - - 101 1868-77 - 100 1869-78 - 99 1870-79 . 97 1871-80 - 96 1872-81 - 95 1873-82 - - 93 1874-83 - 90 1875-84 - - 87 1876-85 - 85 1877-86 - 82 1878-87 - 79 51. Tli,e general result to be derived from a comparison of these investigations shows, it is contended, a rise in prices from the date of the Australian and American gold discoveries to the year 1873, and an almost continuous faU since the latter date, which has reduced prices to a lower point than at any previous period in this century. 52. It is at the same time pointed out that no such change in the level of prices is observable in countries using a silver standard. The statistics on this point are necessarily imperfect, relating as they do to prices in India only. As regards that country we have been furnished with the result of investigations made by Mr. 0' Conor, Assistant Secretary to the Grovemment of India in the Depart- ment of Finance and Commerce, into the prices of the . staple food-grains in different parts of India, and of the principal articles of export. It is, however, very difficult to draw any useful or reliable conclusions from these figures. The conditions of the country, the habits of the people, the isolation of markets owing to want of communication, the constant variations owino- to the influence of the seasons, and many other causes, make it impossible to treat the records of Indian prices as of equal value with those referred to in the preceding SS of this report. It may, however, be safely said that there is no evidence of a rise in prices m India; and there is a general agreement among the witnesses whom we have examined on the point, that the purchasing power of the rupee in that countrv has not fallen. •> 53. It is contended that these results, namely, the general, if not uniform fall in gold prices, and the absence of any corresponding rise in silver prices, support the view that the changes observed are due to a relative scarcity of gold as comnarp'd with all other commodities, including silver. l^ 100 105 91 1,058 243 and 1886-87 -J Increase in Indian manufacture and export of cottons. Q. 2301-4 ; 2319-22 ; 8006-35. D 2 ROYAL COMMISKIOX ON COLD AND SILVER: Exports from United Kingdom have not increased to same extent. 77. On the otter hand, it is pointed out that the exports of similar goods from the United Kingdom to silver-using countries in the East have not increased in anything 'like the same proportion; and it is suggestf^d that some portion of the trade has been diverted from the United Kingdom to India. The following table shows the exports of cotton yarn and piece goods from the United Kingdom to China, Hong Kong, and Japan from 1877 to 1887 : — Quantities of Cotton Yakn and Piece Goods exported from the United Kingdom ,.,, to China, Hong Kong, and Japan. Year. Cotton Tarn. Cotton Piece Goods. Thousands of Lbs. Thousands of Yards. 1877 33,086 394,489 1878 - , - , - 36,467 382,330 1879 - - 38;95I 523,921 1880 - 46,426 509,099 1881 - - 47,479 587,177 1882 - - - 34,370 454,948 1883 33,499 415,956 1884 - 38,856 439,937 1885 - - 33,061 569,339 1886 - - 26,924 490,451 1887 35,364 618,146 pendent of exchange. Q. 8220-38 Due to 78. In reply to these arguments it is contended that the growth of the Indian export causes inde- trade in cotton yarns and goods is due to causes whoUy independent of exchange difficulties ; and was anticipated before those difficulties had existed in their present form. The natural advantages of the country for the manufacture of certain kinds of cotton goods must, it is urged, have resulted sooner or later in a considerable development of her trade in this article. When trading with neighbouring countries in the Bast, the Indian manufacturer has advantages, as compared with his European competitors, in the cost of transport of the raw material, the cost of labour, and the cost of transporting the finished article to market. As an illustration of, the advantages w^hich accrue to an industry established in close proximity to the place where its raw material is produced and where the finished product is sold, the following figures are quoted, showing the recent growth of the Q. 8220. cotton industry in the Southern States of the American Union : Year , Southern States. India. Spindles. 1879-80 1886-87 Increase per cent. 559,320 1,213,346 Looms. Spindles. Looms. 117 12,329 27,963 127 1,461,590 2,421,290 . 65-6 13,502 18,536 37-3 In the following table the consumption of raw cotton ir tlie Southern States, the JNorthem btates, and m India is contrasted. Cotton delivered to miUs in The Southern States India The Northern States 1880-1. 1886-7. Increase per Cent. Bales. 205,000 379,000 1,710,000 Bales. 398,000 726,000 1,727,000 94 91 1 FiNx\L ];ei'()i;.t. -I'AIiT I.'"'' 79. The view above given of the relg,tive advantages of England and Indiii, is, Q. ^oi:; however, disputed ; and estimates have been laid before us which tend to show that the Indian manufacturer, if unassisted by exchange considerations, would be unable to compete with the English manufacturer successfully in any market. The technical character of the questions involved in these calculations makes it very difficult to pronounce an opinion on the subject ; but we understand that a committee of the Manchester Chamber of Commerce has been carefully considering the question, and that their conclusions, which on such a point will have a special value, will shortly be made public. 80. It is further pointed out that the alleged growth in the Indian trade with Theory silver-using countries is true only with regard to the two items of cotton yam and goods. If the total trade of India with gold-using and silver-using countries respectively is examined there does not appear to be any confirmation of the view that trade with European countries is subject to any special disadvantage. The following table shows the value of Indian exports of merchandise (1) to gold-using countries, and (2) to silver-using countries since 1872-73 : — iinsupporlf ) by stati,-ti(;s of the total trade oC India ; Exports to Gold-using Exports to Silver-using Countries. Countries. Millions Ex. Millions Rx. 1872-73 35,456,000 19,780,000 1873-74 35,786,000 19,175,000 1874-75 36,314,000 19,998,000 1875-76 37,983,000 20,062,000 1876-77 39,186,000 21,775,000 1877-78 42,363,000 22,823,000 1878-79 36,082,000 24,811,000 1879-80 40,972,000 26,201,000 1880-81 47,980,000 26,551,000 1881-82 56,395,000 25,507,000 1882-83 58,191,000 25,210,000 1883-84 63,274,000 24,847,000 1884-85 58,339,000 24,862,000 1885-86 58,539,000 25,289,000 1886-87 60,698,000 27,731,000 Comparing the average of the first and last quinquennial period in each case, it wil^ be found that the exports to gold-using countries increased by 62 per cent., and those to silver-using countries by 27 per cent. 81. Nor again does the trade between the United Kingdom and India appear to have or of trade ~ ~ " ' ' with the United Kingdom. been much affected in this way. Our trade with India has increased both absolutely and relatively to that with other countries, as will be seen from the following figures placed before the Commission by Mr. Waterfield. First Report, App. VIII Years. Figures representing the Total Trade between India and United Kingdom. Imports into India. 1874-75 1875-76 1876-77 1877-78 1878-75 . 1879-80 1880-81 1881-82 , 1882-83 1883-84 1884-85 1885-86 - 1886-87 100 96 110 132 93 108 132 127 135 145 147 146 154 Exports from India. 100 101 105 110 101 99 111 125 127 132 121 124 125 Percentage of Trade with India to the whole Trade of the United Kingdom. 9 9 9 9 9 10 D 3 30 ROYAL COMMISSION ON GOLD AND SILVER: Trade of United Kingdom with silver- using countries generally. 82. It is further pointed out that if the trade of the United Kirigdom with the principal silver-using countries since 1S73 is compared with the total trade with all countries, the increase will be found lo be proportionately greater in the former case than m the latter, as will be seenjfrom the follow ing table : Years. 187.3 1874 187.5 1876 1877 1878 1879 1880 1881 1882 Total Trade of the United Kiugdoni. Millions £ 682 668 656 632 647 with previous Average Compared period - 1883 1884 1885 1886 1887 Average Compared with previous period - - - 657 614 612 698 694 720 667 + 1 ■ 52 per cent. 732 686 642 619 643 664 • 45 per cent. Trade with Princip;d Silver-usiDg Countries, viz., India, China., .lapau, Cejion, Strait.-; Settlements, Mauritius, Mexico, Central America. Millions £ 93 94 98 94 102 96 90 85 J 04 104 109 98 -|- 2' 1 per cent. 110 104 99 98 99 102 + 4'08 per cent. 83. On the other hand, it is contended that the growth of trade between India and the gold-using countries has been stimulated by causes which have not affected in an equal degree the trade between India and the silver-using countries, such as the opening of the Suez Canal ; and that the proportion of the total trade of England which is carried on with India might be expected to increase more rapidly than the trade with other countries which impose heavy import or export duties. It is further pointed out that if, from the total Indian exports to silver -using countries, we exclude opium, which is subject to special conditions, it wiU be seen that the exports from India to silver -using countries have increased as rapidly as the exports to gold-using countries. Exports from India to Silver-using Countries (Opium excluded). Official Year. Ex. 1872-73 - 1873-74 1874r-75 - 1875-76 1876-77 - 1877-78 1878-79 - 1879-80 1880-81 - 1881-82 1882-83 - 1883-84 1884-85 - 1885-86 1886-87 - 8,362,000 7,844,000 8,064,000 8,922,000 9,385,000 10,451,000 11,818,000 11,877,000 12,956,000 13,075,000 1.3,729,000 13,553,000 13,979,000 14,554,000 16,653,000 FINAL KBPOET. — PART I. 31 84. It is also stated that the uncertainties caused by fluctuations in exchange tend Discourage- to discourage the investment of capital in silver-using countries, and that the latter "Vestment consequently suffer through the want of proper development. Such countries are in of capital themselves usually poor ; and the capital required for their development must m silver- generally be attracted from gold-using countries ; but the capitalists in the latter "^ing countries are deterred from investing in securities the interest on which is payable in °'*'^" '^'^'' silver, owing to the uncertainty as to the return which they will receive. ?i64^-'^5i47 • The flow of capital is therefore diverted from its natural channels, and its mobt 5954,' profitable employment; and the development of the regions where it is urgently required is impeded. 85. On the other hand, it is pointed out that the increasing competition of the • Indian cotton mills, to which reference was made in § 76, would appear to show that capital was forthcoming when any good opening presented itself ; that the uncertainties of exchange afiect only the capital which bears a fixed rate of interest payable in silver ; and that some compensation is afibrded by the increased stimulus given to industrial enterprise and the consequent demand for capital in the silver-using countries themselves, owing to the fall in exchange. It has also been stated in evidence that the English banks keep as small an Q. 5096. amount of their capital as possible in India, and thereby diminish their power of giving accommodation. 86. There is further an increasing tendency in the case of silver-using countries Curtailment to do business on a cash basis, owing to the inconvenience of having transactions open °* credit, for long periods. This cui'tails credit and diminishes the trade of the countries Q- ^^57. concerned. II. Effects of the Pall in the Gold Price of Silver. 87. Turning next to the effects of the fall in the gold price of silver, we find that Fall of gold one of the effects most prominently put forward is the general fall of gold prices P"<5®s- alluded to in § 46. This fall of gold prices is connected by two distinct lines of argument with the divergence in the relative value of the precious metals, and the monetary changes to which that divergence is attributed. It is said that — (a.) The fall in the gold price of silver has had a direct effect in lowering other gold prices. (6.) The greater demand for gold and the increased work thrown upon it in the monetary systems of the world have caused a general contraction of the currency in gold-using countries, which has increased its purchasing power, or, in other words, caused a fall of prices. Grreater importance is attached by some to the operation of the former cause than of the latter. The arguments urged in relation to it ha\^e already been alluded to in § 61 (c.) ; but it will be desirable to state them rather more fully at this point. 88. The ratio between the level of gold prices and the level of silver prices must, Due directly it is said, ultimately conform to the ratio between the value of gold and the value of *°,^^'^ 'f silver, if any change in the ratio has occurred owing to causes affecting primarily one of silver. or both metals. In other words, gold and silver prices will vary about as much as the value of gold and silver. If there is any change in the relative value of gold and silver, which is not itself merely a consequence of a prior disturbance in the general levels of gold and silver prices, that change will show itself sooner or later in the gold and silver prices of commodities respectively. In the present instance there has been a fall in the gold price of silver, due to one or more of the causes set forth in the earlier part of this Report ; the necessary adjustment in the levels of gold and silver prices will therefore follow, and will be effected either by increased exports of goods from silver-using (jountries to gold-using countries, causing a fall of gold prices, or by increased exports of silver to silver-using countries, causing a rise of silver prices. It is also pointed out that to produce the fall of gold prices here indicated, it is not necessary that the goods should be actually exported from the silver-using countries. A depressing effect of the same kind would be caused by the mere knowledge of the P 4 32 EOTAL COMMISSION ON GOLD ANI> SILVER : fact that a large supply of goods would come upon the market if any symptom of a rise in the gold price manifested itself. 89. One theory which was generally accepted, when attention was first directed to the divergence in the value of the two currencies, was that the adjustment would be carried out by the exportation of silver to the East until its value in the West and prices in the Bast were so affected as to make this operation no longer profitable. Q. 4076-89 ; It is now suggested that instead of a rise in silver prices, or a recovery in the gold 4111-18 : price of silver, the fall in the value of silver has produced a corresponding fall in gold 5422-30 • prices, the level of prices in the East remaining unaltered. 8576-98.' Silver prices are, it is said, less subject to alteration, through causes affecting the ' currency, than gold prices. The immense volume of silver in eastern countries, the conservative habits of the people, the absence of banking facilities and other commercial conveniences, all contribute to this result. The adjustment, therefore, takes the line of least resistance and results in a fall of gold prices in western markets in conformity with the alteration in the gold price of silver. In India the cost of labour, the land revenue, and other similar charges have remained the same. The Indian producer therefore, so long as he can get the same silver price for his produce as before, remains in as favourable a position, and he is forced by competition to accept the same silver price as before the gold price of silver feU. ; but the same quantity of silver can, after the fall, be obtained for a less quantity of gold. The maintenance of the silver price is therefore equivalent to a lowering of the gold price. Consequently a fall is established in the gold price of all commodities exported from silver-using countries to gold-using countries. On the other hand, as the Indian producer only obtains the same silver price as before, or a lower gold price, he cannot give more silver for European produce than before. The B uropean producer must therefore, in order to find a market for his produce, accept the same silver price or a lower gold price. Hence arises a fall in the price of all the produce exported from gold-using to silver-using countries ; and the altered relation of silver to gold thus affects directly the gold prices of all articles comprised in the trade between those countries. 90. It also affects indirectly the gold prices of articles exchanged between, or consumed in, the gold-using countries themselves. So far as these articles are the same, or serve the same purpose, as those which are directly affected, their prices are necessarily forced down by competition ; the remainder, or a considerable proportion of them, are affected by the diminution in the cost of production generally, arising from the fall in the prices of the other articles, many of which are staple commodities or necessaries of life having a direct bearing upon the cost of production. 91. It is also argued generally that the relative prices of commodities must be adjusted so as to maintain (other things remaining the same) the same relative values and thus that an established fall, through varying causes, of the prices of any important groups of commodities will be transmitted through other o-roups bv industrial competition. A fall, for example, in the price of agricultural produce will (methods of production, &c. remaining the same) give a less money income to landlords, farmers, labourers, and all depending on land, and they will not be able to pay so much for other things, whilst at the same time labour and capital will tend to flow into other mdustries so long as prices in those industries remain relativelv high, and thus m both ways those prices will tend to fall. "^ It would have been impossible for a fall in proportion to the gold price of ^ilv^r to have been established m the case of all the great staples of trade between' o-old and silver using countries without indirectly affecting other commodities Keply to 92. In reply to these arguments it is contended — n?;aLots. J^-) That the level of prices m gold-usmg countries can only be affected bv Q 10,226 ^i^'^Se^y^ the relation between the volume of the currency in those countries and ^ ^"'^-^- the work which It has to do; and not by a change in the value of the metal forming the standard of value elsewhere. "icid-i (b.) That a sufficient explanation of the fall of gold prices can be deduced from causes affecting directly the volume of the currency in gold-using countries and +1^ nature and extent ot the business transactions in which it is used. ' (c.) That the assumption of greater stabihty in Indian than in European pripfi« is unwarranted, buch statistics as are available show that there has been as much yiNAL EEPOKT. — PART I. 33 variation In Indian prices as in European prices, and that the fluctuations in the prices of the same article at the same places in different years, or at different places in the same years, are far greater than any which can be observed in Europe. It is therefore urged that there is no foundation in such statistics for the theory that gold prices tend to accommodate themselves to silver prices more than silver prices accommodate themselves to gold prices. (d.) That the gold price of silver is constrained to move in accordance with the ratio between the level of gold prices and the level of silver prices, and that an increased supply of silver in gold-using countries would result in a flow of silver to silver-using countries until the equilibrium had been restored. (e.) That again there has been no decrease in the export of goods from gold-using to silver-using countries such as would be caused, other things being equal, by such a divergence, but rather the reverse. (/.) That the volume of the currency and the methods of using jt remaining' unchanged, a fall in the prices of goods that enter into Oriental trade would be more likely to raise than to lower the prices of goods that are not connected with it, because it would, leave more money free to do business in them. For instance, during the period in which wheat was the chief element in the expenditure of the working classes, it was notorious that a fall in the price of bread led to an increased money demand for other commodities and a rise in their price. (t7.) That so far as statistics of trade go, they are inconsistent with the arguments v.-hich trace the fall in gold prices to the fall in the gold price of silver, and to the efl'ect of silver prices on gold prices. The immediate effect of any such change would be to reduce the gold prices of articles exported to silver-using countries, and consequently the exports to those countries, and to stimulate the exports to gold- using countries. But no such effect can be traced in the trade returns. On the contrary the exports from the United Kingdom to silver -using countries have increased more rapidly than the exports to other countries. 93. The allegation of a general fall of gold prices has already been referred to in Effects of § 46, where it was adduced as corroborative evidence in support of the view that fall of gold gold had become scarcer ; but it is necessary to recur to the subject at this point P"ces. in order to examine the bearing which the general fall of prices, assuming it to be proved, may have had upon the several interests which we are directed to consider. It must, however, be observed that this question only enters within the scope of our inquiry if, and so far as, the fall of prices is due to causes directly connected with the precious metals. In considering, therefore, the effects of a fall in the general level of prices, we shall, for the purpose of the present argument, assume the soundness of the reasons connecting it with circumstances affecting the precious metals and their relation to one another, which were adduced in the earlier portion of our Report. 94. Those who lay stress on the evil effects arising from a fall of prices urge — Dit^iidvun- (a.) That an appreciating standard of value cannot properly perform its most tagcs arisinjr important functions. ^Xe-f ^'^^ *'*' The metal which serves as the standard has to act as ; (i.) a medium of exchange ; ^ qoq9_- . (ii.) a measure of value; (iii.) a means of storing value ; and (iv.) a standard for 4028-50 •^' deferred payments or contracts extending over a long period. 5553-7. ' In the two first of these cases variations are of less importance. The ordinary transactions of commerce are seldom open for more than a few months at a time ; allowance can therefore be easily made for a change in the value of the currency in which these transactions are expressed, and such a change can seldom be sujfficiently marked or sufficiently sudden to cause any substantial loss or gain to either party. The second use of the standard is important, mainly on account of its connexion with statistical and other similar inquiries. But in the third, and to a still greater extent in the fourth, case, the inconvenience of such changes in the standard of value is especially great, and material inconvenience and hardship is caused by any alteration. {h.) That in respect of these two cases an appreciating standard causes more inconvenience and hardship than a depreciating standard, because it imposes a greater burden upon the debtor class ; and it is asserted that borrowers are those on whose enterprise the industrial interests of the country principally depend. (c.) That an appreciation of the standard creates uncertainty as to the profit to be made from commercial transactions, checks enterprise, and therefore impairs the productive capacity of the world. A .^6136. '^^ 84 KOYAL COMMISSION ON GOW) AND SILVEE : Compen- sating advantages of a fall in prices. Q. 6736-7 ; 7718; 9108. Eejoinder to the above arguments. The depression caused by falling prices is due partly to material and partly to sentimental causes. Falling prices will, if other things remain the same, involve a reduction of _ profits and a consequent indisposition to continue producing; but this reduction is to a certain extent only apparent. In so far as the profits, though smaller, have the same purchasing power as before, the person who receives them is, no doubt, in_ the same relative position as before ; but he is more impressed with the decrease in their nominal amount than with the maintenance of their purchasing power. The depressing effect thus produced by falling prices tends to curtail business and discourage enterprise. Further, so far as his production is carried on with borrowed capital, for which he has to pay a fixed rate of interest, or is subject to any permanent charge from which he cannot at once ^ee himself, he sustains a real loss, because his outgoings remain nominally the same, but are really more onerous, while his returns are diminished owing to the fall in the selling price of his produce. Moreover, it is found that wages, which must necessarily form a large proportion of the total cost of production, fall less rapidly than prices. For all these reasons the necessary adjustment in the cost of production, which, to maintain real profits at their normal rate, should be going on p^ri passu with the fall of prices, is always deferred, and is frequently deferred to a point at which production ceases to be remunerative. 95. In reply to these arguments it is said^ {a.) That, if the question lies between rising and falling prices, the latter are the lesser evil, since they tend to a more equal distribution of wealth and benefit the consumer as such, and more particularly the wage-earning classes, whose real wages, on the hypothesis above mentioned, are increased. (&.) That when prices are falling, trade is carried on with greater circumspection and maintained in closer correspondence with the real wants of the community than in times of great inflation and excitement. In illustration of this it is pointed out that the great commercial crises and disturbances of trade rarely occur in times of so-called depression, but are usually the result of the great stimulus to production and speculation caused by a general rise of prices, (c.) That times of falling prices are usually more fertile in inventions and other means of- diminishing the cost of production, or economising the use of capital ; and that the stimulus to improvement so created results in a material benefit to the community, thus affording compensation for any diminution in production caused by loss of profits. {d.) That the transfer of value from one class of the community to another cannot be a national loss ; and that, as regards the country at large, a clear gain can be shown, owing to the large investments of British capital made in foreign countries at a time when prices were high. With every fall of prices the real return on this capital increases and the country gains. (e.) That a fall in profits is to some extent compensated by a fall in the rate of interest on borrowed capital required for production ; and that this compensation extends to all except the few producers who are unable to take immediate advantage of this element in their favour. 96. To the foregoing arguments the following rejoinder is made : — {a.) That as regards labour, the apparent advantage of higher real wages is (i.) only temporary, as it will disappear whenever the final adjustment is made, and will be converted into a loss whenever the movement of prices turns in the opposite direc- tion ; (ii.) more than neutralised by the uncertainty and irregularity of employment which is inseparable from depression of trade, and which frequently results in an actual and serious loss of real wages. (6.) That a fall in prices benefits the capitalists who have lent money for fixed periods at a fixed rate of interest, and in such cases a smaller share of the product of labour is left to be divided between the producer and the wage-earning classes. It is difficult to suppose that the latter can for any length of time receive larger real wages out of the smaller share of the gross product of labour which is divisible between themselves and the producer. (c.) That the methods of economising labour which, as stated above, are more readily devised in times of depression, cannot but produce temporary inconvenience and hardship among the labouring classes owing to the difficulty which they find in accommodating themselves to the altered conditions of industry. FINAL EEFORT. PART i. 35 {d.) That if times of falling prices are more fertile in inventions and other means of diminishing the cost of production, this can only arise from the hardship caused by the fall in prices compelling producers to put forth greater exertions, and does not differ in nature from what would be produced by the imposition of any additional burden, such as increased taxation, on the same class. (e.) That the friction in the labour market produced by constant attempts to lower wages in correspondence with a fall in prices engenders much discontent and social disturbance. (/.) That the labouring classes are raxely able io obtain the full benefit of a fall in prices, such as would compensate them for the disadvantages mentioned above, much of it being intercepted by other classes before it reaches them. (g.) That if a check to production from a fall in prices be admitted, the actual wealth of the world must necessarily be diminished, and that no redistribution of what remains can alter this fact. (7(.) That an active trade with a high rate of interest, even if accompanied by occasional crises, is preferable to the depression which results from falling prices. (k.) That a loss caused by the transfer of value from one class of the community to another may be a national loss, and that the alleged gain to the country at large from investments of capitalin foreign countries at a time when prices were high has been greatly exaggerated. It has sometimes been assumed that this gain is realised on all the payments made by foreign nations to this country which are not made directly in exchange for commodities; but this is not the case. For example, there is no such gain on the payments to this country on account of freights earned by British ships, nor on account of investments of capital abroad in industrial enterprise ; payments on account of such investments may even be reduced by the fall in prices aflFecting profits. The only gain is in connexion with loans made in gold at fixed rates of interest, and the total gain from this class of invest- ments should be reduced by the loss on similar investments made in silver or other currency which has depreciated in comparison with gold. A large portion of this gain is made at the expense of British Colonies and dependencies such as India, and does not accrue to the country at large, but to a very limited class. 97. In § 88 we have dealt with one effect of the fall in the gold value of silver Disturbance upon the international trade between gold and silver using countries, and with the '"^ inter- process by which the adjustment between the levels of prices in those countries ti^adepro- respectiveiy is carried out. ^ duced by a It would appear to be admitted by almost all witnesses, that when- the adjustment fall in ex- has been completely carried out, the conditions of international trade will be precisely change, the same as before the divergence between the values of the two currencies occurred. When the exchange between the two countries has reached a stable point, and the level of prices in each has accommodated itself to the altered state of things, no further disturbance of prices will occur, so long as the equilibrium of the exchange is preserved. 98. In the meanwhile, however, trade, it is said by some, may be diverted to a considerable extent from its natural channels ; and the process of adjustment above described may extend over a long period, and must necessarily continue until the par of exchange between the two currencies becomes comparatively stable. In the present instance, the instability has continued for upwards of 14 years, and there is no sign of the permanent restoration of equilibrium. The complete adjustment of prices to the altered value of the currency has therefore been continually deferred, and this has, it is said, resulted in a stimulus to exportation from silver-using countries, and a corresponding check to exportation from gold- using countries. 99. Reasons have already been given in support of the view that, as it is easier Alleged for prices to fall than to rise, the necessary adjustment would more probably be bounty on carried out by a fall of gold prices than a rise of silver prices. ^ S^-uSng If prices in silver-using countries have not risen, the cost of production and all other countries, charges remain the same, and the producer can make the same rate of profit if he can q^ 2337 ; get the same selling price in silver as before. The fact that the silver selling price 2885-99; is equivalent to a lower gold price does not affect him. ^fio?!^ ' The producer in the gold-using country, on the other hand, who exports produce to the silver-using country, receives the same amount of silver as before, but reduced in value when converted into gold. Unless, therefore, the cost of producing the E 2 36 ROYAt COMMISSION ON GOLD AND SILVER : Increased export of wheat from India. commodity is reduced to the same extent as the 'gold value of the silver which he takes in exchange, he will sustain a real loss. But it is urged that the cost of production does not accommodate itself readily, much less simultaneously, to the fall in the selling price. Fixed charges of all kinds and the wages of labour will fall but slowly ; and until the adjustment is complete the loss will continue. In the present case, it is pointed out that the process of adjustment has been going on since the fall in the value of silver first manifested itself, but that as the fall has been in the main continuous and shows no symptom of having reached its limit, the process cannot have been completed, and the loss is therefore for the time being irremediable. The advantage thus gained by the producer in the silver-using country extends, it is said, not only to those who produce articles exported to gold-using countries, but to those who produce articles for the home market in competition with pro- ducers in gold-using countries ; and similarly the disadvantage attaching to produc- tion in gold-using countries extends not only to those engaged in the export trade to silver-using countries, but to the producers of all commodities which compete with the produce of silver-using countries. The illustration most commonly brought forward in support of these arguments is the export of wheat from India, which, it is said, competes successfully with that grown in England or imported from America and other countries. As silver prices remain stable, the apparent cost of producing wheat in India is not greater than before the fall in silver. JSTo larger number of rupees are paid for rent, taxes, wages, or carriage ; no smaller number of rupees are received by the producer in return; and that return will enable him to satisfy all his wants to the same extent as before. If, when the gold price of wheat is 40s. a quarter, the rupee is worth 2s. in gold, the Indian producer will receive 20 rupees for a quarter of wheat. If the gold price of wheat then falls 25 per cent, to 30s. a quarter, and the gold value of the rupee falls 25 per cent, to Is. 6d., the Indian producer will still receive 20 rupees for a quarter of wheat, and will pay the same amount as before in rent and wages. The producer in the gold-using country on the other hand will receive 10s. less on each quarter of wheat, owing to its price having fallen from 40s. to 30s. ; but the cost of production has not fallen to the same extent, though rent and wages have fallen slightly ; taxation and many other compulsory charges have not fallen at all, and their burden is therefore heavier. Where the producer both owns and cultivates the land himself, and where conse- quently neither rent nor wages enter into the calculation, the disadvantage to the English producer is said to be even more apparent. The cost of production in either case remains practically the same ; but the difference in the return is very great. The Indian producer will still receive, as has been shown, 20 rupees for his quarter of wheat ; and these rupees will buy as much as they bought before, because prices in India have remained stationary. The English producer receives only 30s. instead of 2L, and it cannot be contended that the purchasing power of 30s. is equal to that of the 21. which he formerly received, except on the hypothesis that the prices of all commodities here have fallen in the same proportion, which is not alleged. No adjustment in regard to rent or wages can in this case restore the balance because neither rent nor wages are paid ; and the difference between the purchasing power of the 30s. which he receives at present, and the 21. which he formerly received IS the precise measure of the loss which the English grower suffers as compared with his Indian competitor. ^ If therefore the English and the Indian producers were, before the fall in prices competing on equal terms, the result of the fall will be to leave the Indian nrSducer where he was, and to reduce the profits of the English producer. 100 These circumstances, it is said, account, to a large extent, for the increased export of wheat from India, which appears to have synchronized with the fall in the value of silver, for the serious decline in the price of wheat, and the corresponding depression m agriculture m this country. ^ » India already exports a quantity which is quite sufficient to materially influence the market ]Drice, and the effects of depression are shown, it is urged, in (a) the diminished pi-ofits of landlord and farmer ; (6) the extent of land which has already FINAL REPOKT. PAKT I. 37 been thrown out of cultivation, and the consequent reduction in the annual produce of material wealth in the country ; and (c) the injury sustained by the agricultural labourer, owing, in some cases, to the total loss of his employment, and in others to a considerable reduction in wages. The following table gives the value and quantity of wheat exported from India during the last 10 years, with the average rate of exchange. Years ended Average rate of 31 Maieh. Quantity. Value. Exchange. Cwts. Rx. *. d. 1877 5,o87,000 1,958,000 1 8 5 1878 6,373,000 2,874,000 1 8 79 1879 1,057,000 520,000 1 7 79 1880 2,202,000 1,124,000 1 7 96 1881 7,444,000 3,278,000 1 7 95 1882 19,901,000 8,870,000 1 7 89 1883 14,194,000 6,089,000 1 7 52 1884 21,001,000 8,896,000 1 7 53 1885 15.851,000 6,316,000 1 7 31 1886 21,069,000 8,005,000 1 6 25 1887 22,264,000 8,626,000 1 5 44 s. 1888 13,538,000 5,662,000 1 4-89 101. Another illustration may, it is said, be found in the growth of the Indian cotton Growth of trade, both for home consumption and for export to the silver-using countries of the ■'^''?i''^°. j Bast. The stimulus to the Indian and the disadvantage to the English manufacturer are of the same nature as has been indicated above with regard to wheat. If the selling price in India of Manchester goods- has undergone no alteration, the Indian manufacturer is in precisely the same position both as to cost of production and profits as before ; but, as in the case of the Manchester manufacturer the gold price of goods has fallen, and he has not been able to effect a similar diminution in the cost of pro- duction, he is in a worse position. The figures showing the growth of the Indian cotton trade are given in § 76, and need not therefore be reproduced here. 102. On the other hand it is contended — Replies {a.) That international trade is in substance only barter, an exchange of commodities to above for commodities, and that the conditions of such a trade cannot be affected, except to arguments. a very slight extent, by alterations in the value of the metals in which transactions are Q- 9735-51 expressed. If those metals fall in value, more of them will be required in exchange for 10>226. a given quantity of commodities ; if they rise in value, less will be required. But the real value of the commodities, relatively to other commodities, will remain the same, or will be governed by independent considerations. (b.) That consequently the levels of prices in two countries having currencies of different values must adjust themselves to the relative value of the two metals, and that, at any rate, no appreciable difference can be permanently maintained, (c.) That until a relatively uniforiu level is reached in the two countries, there may be a certain advantage in trade in one direction or another, but that this is much less than is commonly supposed, and that its effects very soon disappear. {d.) That if the disturbance of the trade between England and India had been of the kind suggested, it would have resulted in a falling off of exports of goods to the latter country, and an increased export of silver in their place. But there is no evidence of either of these movements having taken place. (e.) That the arguments used above with regard to the effect of a change in the value of two metallic currencies are equally applicable to the case of a metallic currency and an inconvertible paper currency, in which the changes are frequently greater ; and that consequently, if the reasoning be sound, the export trade of a country would be benefited by excessive issues of such paper. (/.) That any permanent bounty arising from a fall in exchange is impossible. As soon as prices have adjusted themselves to the altered condition of the currencies, any gain which might appear to be made in one direction will be balanced by a loss in another. [g.) That though the fall of gold prices does increase the burden of fixed charges on the English capitalist producer, and makes it difficult for him to secure the same rate E 8 3H ROYAL COMMISSION ON GOLD AND SILVER ; of profit, yet this effect is independent of his having to meet the competition of producers ill silver-using :C0untries, and would exist equally if England had no foreign trade. (h.) That after taking account of the slight advantage obtained by the Indian pro- ducer owing to (i.) the fall in exchange having been almost continuous, and (ii.) the fact that the same nominal taxation does not in his case impose any heavier burden, and of the more serious disadvantage to which the English, producer is put by his inability to reduce the cost of production in the same proportion as the selling price of his produce, the increase in the export of wheat from India can be sufficiently accounted for by the diminution in the cost of sea and land transport, the large area of 23roduction Q. 10,030. which has been made available by the extension of railways, and recent improvements in the- methods of adapting the wheat for the English market. The growth of the Indian cotton trade has' been already dealt with in § 78. (k.) That if, as alleged, the Indian producer, while still receiving 20 rupees for his wheat, can purchase as much of other commodities as before, the price of such of those commodities as are capable of export to this country must have fallen in nearly the same proportion as the gold price of silver. (I.) That the English producer, or wage-earner, is only injured by the fall in the price of his produce, so far as other commodities have not fallen to the same extent, and that so far as this general fall has taken place, he is in the same position as the Indian producer. (m.) That if the fall in the gold value of silver is due to a cause affecting gold, then it is to that cause and not to the divergence between gold and silver that the fall in gold prices is due. But if the fall in the gold value of silver is due to causes affecting silver, then the effect of the fall must have been to keep up silver prices. Consequently if no such fall had taken place, the value of silver in silver-using countries would have been greater, and silver prices would have been lower than they are ; and the gold prices of articles of trade with silver-using countries would have been affected by silver prices just as much as they have been, with the difference, that the change would have been exhibited in a fall of silver prices instead of in a fall in exchange. (n.) That the statistics of the export of wheat from India and the export of cotton goods from England do not support the theory that the volume of either trade is materially affected by the fall in the gold price of silver. The export of cotton goods to India has steadily increased during the period in which the exchange has been falling ; nor does it appear to have met with any check in the years when the fall in exchange was most marked. The increased export of wheat from India during the same period may appear to give some support to the theory ; but the variations from year to year are so great, and correspond so little with the course of • the exchange, that other causes must ' have operated to a much greater extent ; and the variations obviously arise largely from favourable or unfavourable seasons. (o.) That Indian wheat forms but a small proportion of the total supply in the gold- using markets of the world, and is not sufficient in quantity to control the price in those markets. Special position of India. Extent of its gold payments. III. Effect upon India. 103. We now pass from considerations which are of general application to the commercial relations of all countries having different standards to the special case of India. The exceptional position of that country causes it to be affected in a special manner which we propose to treat separately. ^ While the metal forming its standard of value is silver, its political and for the most part, its commercial relations are with a country having a gold standard ' Whilst its taxes are collected in silver, a substantial portion of its outgo'ines includino- the payments which have to be made in this country, are necessarily disbursed in goldf 104. Of the above circumstances, the most important is the fact that the Government of India has every year to convert a arge portion of its receipts from silver into Zld m order to meet its liabilities m England. a'Jiu, In practice this operation is effected by selling in London for gold bills payable in India m rupees. As these gold payments are, for the most part, fixed in amount, any fall m the value of silver .necessarily compels the Government to sell a larger quantity of FINAL EEPOKT.— PART I.. 39 bills, or, in other words, to pay a larger quantity of silver. It is this which constitutes its chief difficulty, for (a) it is always uncertain what additional number of rupees will be required in any one year, and all calculations of revenue and expenditure are there- fore open to serious modifications between the date when they are made and the date when they are realised ; (b) it is extremely difficult, on political grounds, to increase the existing taxation ; and (c) the increased amount of silver now required to discharge its gold liabilities imposes a burden upon the Indian taxpayer in respect of a considerable proportion of those payments. 105. The bulk of the gold payments which the Grovernraent of India is under obligation to make fall under one or other of the following heads: (1) interest on debt, (2) interest on the stock of the guaranteed railway companies, (3) expenses on account of the British forces maintained in India, (4) pensions and non-eftective allowances payable in England, (5) the cost of the Home administration, and (6) stores purchased in England for use or consumption in India. In order to show the effect of the fall in exchange upon the total amount of these remittances Mr. "Waterfield has divided them First Report, into two classes according to the distribution laid down in our order of reference, -^.pp. VIII. namely (i.) payments under old or fixed contracts, and (ii.) payments under new or ^ "^ current contracts. 106. As regards old or fixed contracts the actual sterling (net) payments in 1874-75, Effect on the last year in which the average rate of exchange was above Is. lOd., were 11,704,953L, gold pay- and the number of rupees required to discharge this liability was 12,67,88,727. In [^^'^f^ii ^ 1885-86 the actual sterling (net) payments were 11,321,979L, and the number of rupees exchange, required was 14,88,58,141. At the rate of exchange current in 1874-75, the same n. ]640-4; amount in gold could have been provided by an expenditure of 12,26,40,330 rupees, 1737. and the additional number of rupees required owing to the fall in exchange was consequently 2,62,17,811. Under new or current contracts the sterling (net) payments in 1874-75 were 3,339,968L, equivalent at the then rate of exchange to 3,61,78,726 rupees. Owing to large payments received from railway companies in 1885-86, the expenditure under this head in the latter year was less than the receipts by a sum of 311,996L Apart from these receipts the actual payments were 4,331,074Z., which would have required. 5,69,43,722 rupees; at the rate of exchange of 1874-75 the same payment would have been liquidated for 4,69,14,443 rupees, showing an increased charge owing to the fall in exchange of 1,00,29,279 rupees. Owing, however, to the receipts above mentioned the actual sterling payments under the two heads together were only ll,009,983il., and the number of rupees required was 14,47,56,107. To provide the same amount of gold in 1874-75 would have required 11,92,60,770 rupees, showing a difference due to the fall in the exchange of 2,54,95,337 rupees. The effect on the finances of the Grovernment of India will perhaps be seen more clearly by considering that a fall in the value of the rupee from Is. 6d. to Is. 5d. would in the year 1886-87 have made it necessary for the Grovernment of India to find an additional sum of at least 11,000,000 of rupees. A fall from Is. 5c?. to Is. 4d. would have had a greater effect, and a fall from Is. Id. to Is. 6d. a somewhat less effect. 107. It is, however, pointed out — ■ Eeply to (a.) That the real burden of the increased charge shown to have been imposed on above _ the Indian Exchequer by the fall in exchange is limited to that portion of it which allegations, represents payments contracted to be made before the fall in exchange commenced, or when the fall was not so great as it has since become. (h.) That consequently no loss can properly be said to arise from the bulk of the payments which fall under the head of " new or current contracts." If a larger number of rupees is required to represent a given quantity of gold, that quantity of gold will purchase a larger quantity of commodities than before. In the case of many commodities required by the Grovernment of India the gold price has fallen even more than the gold price of silver ; and in such cases the same number of rupees will purchase a larger quantity of commodities than before. (c.) That even in the matter of payments under "old or fixed contracts," the position of India is no worse than that of any other country which has contracted a permanent gold debt. The fall of gold prices, if due to a scarcity of gold, has increased the burden of all contracts to pay a fixed quantity of gold ; and it is immaterial whether the gold has to be purchased by a larger quantity of commodities or a larger quantity of silver. E 4 40 ROl'AL COMMISSION ON GOLD AND SILVER Difficulties arising from uncertainty as to ex- change. Q. 1646-7. Difficulty of obtaining capital for development of the country. Q. 16.53 ; 1771. Unceitainty of all finan- cial arrange- ments in India. ((/.) That in the case of India there can be little doubt that this debt, the burden of which is complained of, has been incurred for useful purposes, and has increased the productive capacity and the wealth of the country, thus making it as well able to bear the burden of taxation as it was before the fall in the value of silver took place. 108. The difficulties of the Government of India consist, however, not only in the additional number of rupees which it is compelled to find from year to year in order to discharge its gold liabilities, but in the uncertainty caused by the fluctuations in the rate of exchange, which makes it impossible to forecast with any accuracy its future expenditure. The following table shows the rate of exchange estimated in the Budget, the rate actually realised, and the additional expenditure caused, or the saving effected by the divergence, since 1874-75. Year. 187^75 1875-76 1876-77 1877-78 1878-79 1879-80 1880-81 1881-82 1882-83 1883-84 1884-85 1885-86 1886-87 1887-88 Rate of Exchange estimated in the Budget. Rate actually realised. Difference. Excess. d. 10 9 375 875 23 4 8 8 8 7-5 7-5 7 6 5i *. d 1 10 1.56 1 9 626 1 8 508 1 8 T91 1 7 794 1 7 961 1 7 956 1 7 895 1 7 525 1 7 536 1 7 308 1 6 254 ] 5 441 I 4 898 Rupees. 15,91,764 19,57,917 38,43,050 56,87,129 4,24,722 10,17,482 37,46,890 18,97,307 56,82,638 65,17,721 71,90,097 Saving. Rupees. 76,736 84,40,737 3,62,902 It will be observed that during the above period the actual rate exceeded the estimated rate in only three years, and that on the whole the effect of the fluctuations was to cause a considerable increase in expenditure over what had been anticipated when the financial arrangements of the year were made. 109. Reference has been made in a previous paragraph to the difficulty of attracting capital to silver-using countries, owing to the reluctance of capitalists to invest in securities, the return on which they are unable to calculate with certainty. This consideration applies with special force to the case of the Grovernment of India with whom it necessarily lies to take the initiative in any scheme of public works for the better development of the country. The form of investment which native capital has adopted from time immemorial is hoarding, and though there may be some tendency to invest in the securities offered by the Government, it has made but slow progress, and since the divergence between the value of gold and silver first manifested itself the inducement to hoard the more valuable metal has rather increased. In former times, when the relative value of the two metals was more stable the Government were able to raise loans, both capital and interest being payable in silver ; and the terms on which they were raised were about the same in Calcutta and London. The price of 4 per cent, rupee paper in 1873 varied between 101^ and 105i in Calcutta, while the price of the 4 per cent, sterling stock in London was from 101 to 106. But in 1887 the former security was from 951 to 99^ while the 3i per cent, sterling stock in London varied between lOOJ and 104, or but verv little below the 4 per cent, stock 14 years before. ' • 110. Of the three sources of embarrassment to the Government which we have indicated above, perhaps the most serious is the uncertainty which must necessarilv attend all the calculations on which their financial arrangements for the future «^o based. are Apart from any question of exchange, both the revenue and expenditure in India are from various causes, it is said, more subject to fluctuations and uncertainty than is the case with European States generally. PINAL REPOET. — PART I. 41 But in addition to these contingencies an unexpected fall in the value of silver may involve a loss of revenue which could not have been foreseen when the financial arrangements of the year were made, and this difficulty would be aggravated in the case of arrangements extending over many years. The' extent of the inconvenience thus caused may be inferred from the figures given in § 108. Even if the precise limits of the fluctuations could be foretold with greater accuracy, Q. 1599. neither revenue nor expenditure could be made to accommodate itself to variations of such magnitude. For it would be difficult to impose and remit taxation from year to year without caiising great discontent among a population who are unaccustomed to changes in their fiscal arrangements, and to whom it would be difficult to explain the circumstances which had rendered the changes necessary. 111. Grave objections are also entertained to progressive increases of taxation Objections to meet either unexpected fluctuations or a continued fall in exchange. A large to increasing portion of the revenue generally is inelastic and nob easily increased. The land taxation, revenue, from which source is derived nearly one-half of the net receipts of the Q- 1745-8. Government, has been fixed on a silver basis, in some cases in perpetuity and in others for long terms of years. The salt tax has been increased since the commencement of our inquiry, and we are told that it would be difficult to raise much additional revenue from this source. The opium receipts are of a very precarious nature, and have shown a tendency to fall off in recent years ; and it is stated that it would be difficult to find any available branch of the Indian revenue which could be relied upon to bring. any large addition to the Exchequer. ^ 112. Another interest to which our attention has been directed is that of the Case of European employes of the Government of India. They receive salaries paid in silver, ^^^''"^^Ig^j^f and calculated with some regard to the cost of living in India, and to the necessity ^^^Q Govern- imposed upon them of remitting home a certain proportion of their incomes. So ment. far as their incomes are spent in India or are devoted to the purchase of commodities, Q. 1661-5 ; the gold price of which has fallen as much as that of silver, they do not sustain 1843-52. any loss. But on a large proportion of their remittances to Europe they derive no benefit from the fall of gold prices, as the fall has affected wholesale more than retail prices, and has not affected at all many of the prices in which they are interested. In reply to this it is pointed out that the loss sustained by the servants of the Government in connexion with their remittances is a matter for discussion ' and settlement between themselves and their employers. If the salaries of the Indian officials do not represent as much real remuneration as before, the Government will ultimately be compelled, by the same forces which settle the market value of all other commodities, to increase their salaries. 113. The above allegations relate to niatters affecting only the Government of Effect upon India as a Government, and its employes. The country in its commercial intercourse ^^^ country with other countries is subject to the same disadvantages and disturbing infiuences "^ ^ '^ which affect the international trade of silver-using countries generally with gold-using jq54_»o' countries, and which have been described above. On the other hand it is urged — (a.) That with the exception of the European employes of the Government, no class in India can be shown to have suffered by the fall in exchange; that, on the contrary, those interested in exports would appear to have gained some advantage by the stimulus given to their several industries, and those interested in imports have secured the benefit of the fall of gold prices which has taken place in Europe. (6.) That consequently the people of India are as well, if not better, able to bear the increased burden of taxation rendered necessary by the fall in the value of their currency. (c.) That if and so far as silver has fallen, silver prices are higher than they would have been without that fall ; and in that case the fall in silver, if it has added to the sum which the Indian Government have to raise by taxation in order to pay their gold debt, has lightened the burden which, but for that fall, would have rested on the Indian taxpayers. A 56136. F 42 ROYAL COMMISSION ON GOLD AND SILVEK Remedies wtich have been sug- gested tor the alleged evils. Remedies proposed for Evils above described. 114. We have now enumerated the principal allegations which have been made with regard to the evils or inconveniences resulting from the disturbance in the relations between the two precious metals. 115. Eeserving until a later portion of our Report the expression of our own opinion as to the magnitude and importance of these evils, we will next proceed to state the remedies which have been proposed to meet them, and we shall for our present purpose assume that they have been proved to be of a sufficiently serious nature to require a remedy. A reference to the preceding paragraphs of our Report will show that the element of disturbance on wbich the principal stress is laid in connexion with all the evils which have been alleged, is the want of fixity in the relation between, the two precious metals. The remedy which has been put before us most prominently and as most likely to remedy the evils complained of to the fullest extent possible, is that known as bimetallism. Nature of a bimetallic system of currency. Q. 3461. Bimetallism. 116. A bimetallic system of currency, to be completely effective, must, in the view of those who advocate it, include two essential features : (a.) An open mint ready to coin any quantity of either gold or silver which may be brought to it. (h.) The right on the part of a debtor to discharge his liabilities, at his option, in either of the two metals at a ratio fixed by law. It is urged that, though such a system might under certain conditions be established in one or more countries independently, the maximum amount of advantage would not be derived from it, unless it were adopted by international agreement between the principal commercial countries of the world. 117. We propose to consider the subject under the following heads : — I. The effects which would be produced by such an arrangement if carried out. II. The possibility of carrying it out as proposed. III. The consequences which will result if no steps are taken to restore stability in the relative value of the two metals. Its effects in maintaining a permanent relation between the two metals. Objection that the operation of the Gresham law would prevent any permanent relation. 118. It is asserted that if a sufficient number of the principal commercial nations of the world were to agree upon an arrangement such as that described above, a stable relation of value between the two metals would be secured, or that at any rate the variations in that relation would be confined within very narrow limits. If the possessor of any quantity of silver could, by taking it to the mints, have it converted into coin available as legal tender at a fixed ratio with gold, he would never part with it except at & gold price closely approximating to the value represented by that ratio. The variations in the gold price of silver would therefore be scarcely appreciable. 119. On the other hand it is contended that inasmuch as the supply of each metal the demand for non-monetary purposes, and the cost of production, vary from time to time, and the relative value of the two metals must depend in the main upon the action and reaction of these factors, no conventional arrangement such as that suggested could prevent their operation. Experience proves that if two metals or two kinds of money are available for the discharge of debt, the metal which is relatively cheaper will be preferred, and the metal which is relatively dearer will disappear from circulation. If, for example, in a particular country the relative value at which gold and silver exchanged in the open market was as 20 to 1, and the legal ratio were fixed at 151 to 1, no gold would be taken to the mints. Those who possessed gold would sell it for silver at the market rate and bring the silver to the mints for coinage ; all the gold in the form of coin would be melted down for use in other ways, and the currency of the country would consist of silver alone. If the same legal ratio were fixed in several important commercial countries, the effect would be the same, though less in degree ; and the effect could only cease if all the commercial countries of the world adopted complete bimetallism. FINAL REVORT. — PART I. 43 120. To this it is replied that, on the assumption of an international agreement between the principal commercial countries, the effects of a bimetallic system so. established would be universal, and there could not be any appreciable difference between the relative value of the metals in the open market and their legal ratio. On this hypothesis the demand for gold for purposes of currency from the other countries of the world could not be considerable ; and consequently the only purpose for which the gold could be required in considerable quantities would be for industrial use or for hoarding ; and the demand for these purposes when compared with the annual production and the existing stock of the metal would not be sufficient to cause it to disappear from circulation. 121. It is further urged that the ]:)roportion between the existing stocks of the two metals and the probable conditions of their future production are such as to render it extremely unlikely that gold would ever cease to circulate, or that any serious disturbance of the equilibrium would occur, at any ratio which is likely to be adopted. 122. It is admitted that no international arrangement would be likely to include all the countries of the world ; but it is pointed out that on the assumption that the principal commercial countries were parties to it, the countries outside the Union could only withdraw gold from those inside it by sending commodities in exchange for it, and that the international trade with such countries would .not be of sufficient importance to make it reasonable to expect that any substantial impression could be produced in this way on the stock of gold existing within the bimetallic area. 123. In support of the view that a fixed ratio can be effectively maintained over a long period, attention is called to the steadiness in the relative value of the two metals which was maintained from the beginning of this century down to the date when the coinage of silver was suspended by the Latin Union in 1874. Since 1874, on the other hand, the price of silver has on the whole fallen considerably, and has also been subject to constant variations. In §§19 and 21 figures are given showing the relative value of the gold and silver produced over a considerable number of years prior to 1874, together with the relative value of the two metals in the market ; and similar information for the period since that date. These figures, it is urged, show that the existence of the legal ratio in Q. 3468. France during the first 70 years of the century was sufficient to maintain the market ratio in conformity with it, notwithstanding very large variations in the quantities of the two metals raised from the mines ; but that when the operation of the legal ratio ceased to have its effect, a change in the relative market value of the two metals speedily manifested itself. 124. On the other hand, it is contended that the stability which was maintained The effect during the first 70 years of the century was due to accidental causes, which enabled ofthebi. the bimetallic system to be maintained ; and that the final result would not have ^gtem of been materially different had no bimetallic law been in existence. the Latin . Union. It IS said that — {a.) Down to the time of the great gold discoveries the conditions of the supply of, Q. 6336-42 ; and demand for, the two metals were such as would of themselves tend to keep their 6568-72. relative value nearly uniform. Had silver been produced in increasing quantities in the earlier part of the century the ratio would have been powerless to prevent its falling in value, as there was no gold in the country which could have given place to the increased supplies of silver ; and the operation of the ratio can only be effective in maintaining the relative value of the two metals when there is, within the bimetallic area, a sufficient stock of both. Down to the year 1846, therefore, the ratio was maintained by causes independent of the bimetallic law. (b.) At the time when the increased supplies of gold began to be placed on the market the French currency had ceased to be bimetallic, and practically was composed of silver only. The large influx of gold altered the relative values of the two metals ; gold became over-valued in the ratio and silver under- valued. The latter metal was consequently withdrawn from France for export to the Bast and other places ; and the deficiency in the French currency was supplied by the over- valued gold. To this extent the bimetallic system prevented a serious fall in the value of gold which could not otherwise have been avoided. But it is, pointed out that this result was mainly due to the fact that the French currency was not, at the time when the disturb- ance in the ratio was threatened, on a bimetallic but on a monometallic basis. France, F 2 44 EOYAL COMMISSION ON GOLD AND SILVER Q. 3477 ; 3486. Circulation of silver in the United States and Holland. instead of having a stock of both metals circulating at the legal ratio, had a large stock of the under-valued metal only, and the over-valued metal was poured in to take its place. If she had had a large stock of the lattei- already in the country the operation of the bimetallic system could not have taken place. Conversely, when the supply of silver began to increase, her currency was almost exclusively composed of gold, which she was able to dispose of in order to meet the demands of Germany and other countries, replacing it again with the cheaper metal, which at this time was silver. Thus, her monetary system, instead of being bimetallic, happened, whenever the compensating action of the ratio was called into play, to consist almost entirely of the metal which was the cheapest for the time being. In support of this view the following figures are quoted, showing the total : — Coinage of Gold and Silver in France between the Years 1816 and 1880. Years. 1816-20 1821-25 1826-30 1831-35 1836-40 1841-4,5 1846-50 1851-65 1856-60 1861-65 1866-70 1871-75 1876-80 Gold. Silver. £ £ 9,758,000 4,970,000 2,329,000 17,632,000 1,470,000 25,160,000 4,131,000 32,881,000 2,949,000 15,241,000 797,000 15,166,000 6,472,000 21,556,000 63,346,000 7,159,000 108,027,000 3,333,000 38,337,000 875,000 47,733,000 17,010,000 12,376,000 13,704,000 25,819,000 2,838,000 It will be observed that from 1816 to 1820 the coinage of gold exceeded that of silver, that from 1821 to 1850 the coinage of silver exceeded that of gold, and that since the latter date gold has again been the metal chiefly brought to the mints. (c.) The stability of the ratio was only nominal as one of the two metals was, in actual practice, generally at a premium. From 1820 to 1847 there was constantly a premium on gold which was nearly always as much as one per cent., and occasionally rose to as much as two per cent. Any increase in the supply of silver would of course have increased this premium. 125. To this it is replied that the premium never exceeded very small proportions and only applied to a limited number of transactions in which gold was required for special purposes, such as export ; that for the ordinary transactions of the country there was always a sufficient supply of either metal ; that as matter of fact both gold and silver were brought to the French mint, and coined=^= in every year except m 1871 and 1872, when no gold was coined; that throughout the period in question gold and silver coins were accepted for all practical purposes at the ratio fixed by the law; and that the efficacy of the bimetallic ratio is proved by the fact that an immense increase m the supplies of gold produced no sensible disturbance in the relative value of the two metals. 126. It is also pointed out that at the present moment in the United States upwards of 55,000,000?. of silver dollars or silver certificates are circulating side bv side with gold and are accepted in payment of all debts as equivalent to gold thouo-h th^ intrinsic value of the silver dollar is not more than 70 per cent, of the value of a o-old dollar. &"^^ Similarly in Holland where the standard is gold and the coinage of silver i^ Ttra gdd'c'cuS 30,000,000Z. is maintained at a gold valu!, concurrently These two cases it is said, are proofs of the possibility of maintaining a Wal ratio between the two metals as com, permanently diffprino- frorv, +1,^ v^ i T ?• without the dearer metal being driven ol of circulg :" eLm:Sd Lg a T^emium""" * In the year 1860 no five-franc pieces were coined, but silver ooin must receive from other countries in payment of interest on her gold debts a larger ^' quantity of goods, or money which will buy more- goods, than she would otherwise have received, and that if under these circumstances a change were introduced which tended to cause the depreciation of gold or the raising of gold prices, a serious injury would be done to the general interests of the country. The rejoinder to this argument will be found in § 96 (Jc). 150. Any advantage now gained by some classes in the country owing to the fall of Rife of prices would also, it is said, be neutralised. Prices would rise, and since, as has been ^^°^^ ^°^ A .56136. Gi- ROYAL COMMISSION ON GOLD AND SILVER : Injustice of making a legislative change in the con- ditions of existing contracts. Q. 4123-44 ; 4154; 5383. EflPect upon ladia of a rise in the value of silver. Q. 2063-5. already pointed out, wages do not respond immediately to movements in the level of prices, the wage-earning classes would suffer. The process of adjustment which has been going on since the fall in prices commenced would begin in the opposite direction, and all the friction produced by it would be repeated. To this it is replied that wages respond more readily to upward than to downward movements in the level of prices, and that, until a real stability of the standard is attained, the process of adjustment and the consequent friction among the different interests concerned must be going on in one direction or another, and that the advan- tages of a stable standard would amply compensate the country for either the temporary friction necessary for the final adjustment, or the permanent loss of the profit which is said to arise from the debts due to it by foreign nations. 351. The extent to which the adoption of a ratio making silver more valuable as compared with gold than at present would affect prices, is a question which depends upon the view taken of the effect of the volume of the currency upon prices, and the arguments set forth in §§ 58 and 59. But it is said that, even if those who entertain the view that monetary changes have been the most potent factor in producing the fall of prices in recent years be mistaken, the fact that such a belief is entertained by a large number of pei'sons would be likely to foster speculation, and thus produce, if only temporarily, a rise of prices which might attain a high level. 152. If, and in so far as a rise of prices resulted from the restoration of silver to its former relation with gold, debtors would benefit at the expense of creditors, and, on the assumption that the rise of wages would be slower than the rise of prices, the wage- earning classes would suffer most; but it is suggested as probable that there would not be a long interval between the rise of prices and an upward movement in wages. It is urged that it would be unjust to make a deliberate change in the conditions of all existing contracts by a direct act of the Legislature, and so give an' advantage to one class in the country at the expense of another. 153. To this it is replied — (a.) That those who have gained by the changes in the value of the precious metals have gained by accident, and not from causes due to their own foresight or calculations. (b.) That the injury caused by the change would be of a temporary character only, while the chang(3 would itself produce permanent benefits of much greater extent. (c.) That the right of the State to make alterations in its currency laws cannot be disputed, and that all contracts must be assumed to have been made subject to this risk. (d.) That if the change is necessary in order to place the currency of the country on a satisfactory basis, the State is justified in making it, even though incidentally it may have an injurious effect upon the interests of some individuals or classes and that such disadvantages are of less moment to the community at large than the adoption of a standard of value possessing the maximum of stability. 154. To revert to the former ratio would also, it is said, have a specially prejudicial effect in the case of India. If the effect of bimetallism at that ratio should be to appreciate silver and cause silver prices to fall, or if the gold price of Indian produce did not rise to the same extent as the gold value of silver was raised, the Indian producer would for the same amount of produce receive less silver, whilst he would,"subject to the reduction of taxation which would be caused by the advantage gained by the Government as regards its gold payments, have to pay the same amount of rent and taxes as he now pays. In this way a burden would be thrown on the Indian producer. He would also be deprived of the advantage which the continued fall in exchano-e is alleged to give him in competing with other countries. '^ It is also said that, if it be true that the gold price of the commodities produced in India has fallen in response to the fall in the gold price of silver it does follow that the reverse process can be counted on. Where there is production of any commodity and competition for its sale, the process of reducinf ■nfir'A iH mnrfi fiaav tha.Ti tbn.t nf m.isi-no' it. Tt is nnaaiVilo +/^^ +!,„+ 4„ .. . o price is more easy than that of raising it. It is possible, too, that in _„_ the sale of produce with Russia, or any other country whose currency deprectat the Indian producer might, in order to secure a sale, be compelled to take the s competmg for es, same FINAL REPORT. — PART T. 51 gold price as at present. This would be equivalent to a lower silver price, and might, it is alleged, produce serious results to the trade of the country. 155. On the other hand it is urged that it is very improbable that the gold price would not rise if the volume of currency in the gold-using countries was increased by the restoration of silver to its former relation with regard to gold ; and that in so far as prices fell in India, consumers and the wage-earners (so far as they are paid in money) could obtain those advantages which are said to have accrued to the corresponding classes in England from the fall in gold prices. 11. 156. "We will pass next to the questions which have been raised as to the Practica- practicability of (a) inaugurating, and (b) maintaining, such an agreement as that bility of which is proposed between the chief commercial nations of the world. proposed It is said on the one hand that France and the United States would be unwilling eHher ratio, to agree to an arrangement based on the ratio at present subsisting between the market value of the two metals, on account of the large amount of silver which is held by those countries, and which has been coined at a ratio of \5^ to 1 in the case of France, and of 16 to 1 in the case of the United States, If a ratio greatly differing from this were adopted, the standard silver coins of those countries must either become admittedly token coins, or pass current at a large I'eduction from their nominal value. 157. On the other hand it is urged that the interest of these countries in securing a stable ratio between the two metals for the future is so great that they would probably agree to such an arrangement rather than be left in their present position, with the possibility of a still further fall in the gold price of silver. It is argued also that the inconvenience in the case of the United States, or of France, if the ratio, say of 20 to 1, were fixed would not be serious. There is no reason why the silver existing in the form of coins at the ratio of 15-|^ or 16 to 1 should not continue to circulate and be received concurrently with a new coinage at the altered ratio, and why people should not continue to receive them as readily ns they do now. It may be said that there would be a danger of the manufacture of imitations of the existing coins. But this danger is as great at present, when the gold price of silver differs so much from the legal ratio ; and as regards the silver certificates which circulate to so large an extent in the United States, repre- senting silver at the ratio of 16 to 1, if 25 per cent, of the existing quantity were converted into a fiduciary issue, which might be done without difficulty or public inconvenience, the position of the United States Government would be unaltered. 158. As an alternative arrangement, the adoption of the former ratio of 15^ or 16 to 1 is suggested ; and it is contended that if such a ratio were adopted by England, the United States, the Latin Union, and Grermany, all the other commercial countries of the world would join the Union ; and that whether they joined or not, the effect of such an arrangement would be to maintain that ratio. 159. The position of India in view of any such combination would, however, it is said, be very difficult. On the one hand the amount of her gold liabilities makes a stable relation between the two metals a matter of the first importance to her ; and on the other, any serious rise in the value of silver would, it is said, produce the evils already pointed out. 160. As regards the maintenance of the bimetallic arrangement, if once established, Possibility of it is asserted that it would be to the interest of all the' contracting parties to adhere "°''^°*'*'^gft to it, and that there would be no inducement to any Power to secede. The seceding ff agrfed Power would, it is urged, cause more inconvenience to its own subjects than to anyone upon. else, and no sufficient motive for secession can be suggested. 161. On the other hand it is pointed out that the action of a nation is not always Q. 5787. regulated by a wise regard for its own interests alone. Its policy is sometimes mistaken, and sometimes actuated by other motives than self-interest. The adoption of a ' gold standard by Germany is cited as an instance of a currency change made without any advantage commensurate with its cost. To this it is replied that the currency change made by Germany took place at a time when the effects of such a change were unknown and unforeseen, and that with 52 KOYAL COMMISSION ON GOLD AND SILVER : Effect of suspension of cash payments. Q. 3670. Tendency lo accumulate gold even under a bimetallic system. Q. 9286-90. the experience gained since 1873 no similar change need be apprehended in the future, if an understanding between the chief commercial nations were arrived at. 162. One probable cause for any failure of the bimetallic arrangement would, it is said, be found in the necessity for the suspension of cash payments and the issue of a large amount of inconvertible paper in any one of the contracting countries. This measure, however, it is said, would not aflFect the stability of the legal ratio in other countries. The only result of the establishment of an inconvertible paper currency in a bimetallic country would be that its specie, whether gold or silver, or both, might flow to other countries and increase the circulation of the rest of the world. The principle of the bimetallic system would remain intact, though it might cease to be practically operative in that country. If a bimetallic arrangement were in force, the effect of such a step would, as regards the flow of the precious metals from the country suspending cash payments, be precisely the same on other countries as at present, whilst its distribution might be so altered as to cause less disturbance. 163. In reply, it is contended that though the suspension of cash payments in any one country might not defeat the operation of the bimetallic arrangement in other countries, it would materially restrict the benefits supposed to flow from that system, both by limiting the area within which it would operate, and by pouring into other countries the stock of metal, whether gold or silver, previously held by the country suspending cash payments. 164. It is further urged that there is a growing tendency among all commercial nations in favour of the use of gold rather than silver for currency purposes, and that the fear of holding too much of the less popular metal in their reserves Vv'ould induce Grovernments and bankers to seek to get rid of it and increase their store of gold. A struggle for the possession of gold might thus be brought about, which Would prove a severe strain upon the bimetallic arrangement. This motive, again, would be intensified by a sense of the precarious nature of the arrangement, by apprehensions that other nations would depart from it, and by a desire on the part of each nation to protect itself, as far as possible, from the mischievous consequences which would result from such departure, if it were left with a large stock of the less esteemed metal. Further, if it should prove that, for any of the reasons mentioned above, any of the nations should not adhere to the arrangement, the. position of England, if she adhered to it, would be seriously compromised. The whole arrangement depends upon leaving free scope to commercial motives ; and in this respect England is less likely to interfere than foreign Governments with the free commercial distribution of the precious metals. 165. In reply, it is asserted that the sentiment in favour of a gold standard is based merely on the convenience of that metal as a circulating medium for certain purposes • that the tendency of the more advanced nations is towards the use of paper or other substitutes for coin ; that so long as the different nations maintained the unlimited coinage and full legal tender of silver, the hoarding of gold would be found unprofitable and perhaps impossible ; and that if the legal ratio fixed approximated to the market ratio, and the arrangement were for an indefinite and not a fixed period, there would be much less ground for any of these apprehensions. Conse- quences of maintainicg the status QUO. III. 166. In addition to the arguments stated above, the advocates of bimetallism ura'e in support of their proposals that far greater difficulties will arise if the hope of establishing a stable ratio between silver and gold is finally abandoned. It is asserted — {a.) That even if the countries of the world were divided permanently into o-nld using and silver-usmg nations there would be continual fluctuations in the relativp value of the two standards, with the evils which necessarily flow from such a state of things, and that as this state of things never prevailed in the past before 1873 it is probable that it might give rise to unsatisfactory results, bevond those of wbinl.' we have experience. " " (&.) That it is impossible to devise any satisfactory principle on which the permanent division of the countries of the world into gold-using and silver-using nations could FINAL EBPOET. — PART 1. 53 be based, and that, if such a principle could be devised, it would not be found possible to apply it in practice. (c.) Tbat no settlement of the relations between gold and silver money, of a satis- factory nature and affording a prospect of permanence, is probable or possible without the acceptance of the principle of the unlimited coinage and full legal tender of both gold and silver at a fixed ratio. (d.) That in the absence of such a settlement every nation using either gold or silver as its standard will remain liable to disturbances of its standard of value from time to time, which might have very serious consequences. (e.) That the existing situation presents no elements of finality and no reasonable ground for anticipating any definitive solution of the difiiculties with which it is now surrounded. On the contrary a further fall in the gold price of silver, to even half the extent of that which has taken place since 1873, would dangerously affect the financial position of the Gove^-nment of India ; would still further disorganise our commercial relations with that and other silver-using countries ; and would materially aggravate the depression which has affected so many branches of trade and industry. Further Eemedies. 167. The system of currency which we have dealt with in §§ 116-166 is that Remedies which is usually known under the name of bimetallism. "We have examined it at ? -^^^t ^j,'-'*° length, partly on account of the weight of authority by which it is supported, and partly because, if the serious nature of the evils described in §§ 69-113 be admitted, no other proposal which has been submitted to us appears to apply so complete and practical a remedy. Two schemes have indeed been suggested for attaining the end in view. According to one proposal the standard coin would be composed of both metals An amalgam in certain specified proportions. This could be effected either by fusing the two com. metals and forming an amalgam coin, or by the insertion of a small disc of gold in the centre of a silver coin. The practical difficulties in the way of both the manufacture and the use of such a coin appeared to us so great that we did not subject either form of the proposal to a minute examination. 168. A plan presenting fewer difficulties has been submitted to us by Professor Paper based Marshall. His suggestion is that the currency should consist of paper issued against "ponj'lmked deposits of the two metals in certain defined proportions. Any person bringing to the Issue Department the required quantity of gold and silver bars would receive the equivalent in currency. The principal advantage claimed for this plan is that the currency would be really bimetallic, that is to say, it would necessarily always consist of the two metals in the prescribed proportions, and not of that one alone which happened to be for the moment most easily procured. Its effect upon the production of the two metals would, it is said, also be beneficial, as it would encourage the production of the metal which was being produced at the greatest cost, instead of the reverse, which would be the case under what is ordinarily known as bimetallism. On the other hand, if the supply of one metal was materially reduced, a contraction of the currency would not be avoided ; and to ensure the effective operation of the scheme it would be necessary that all the important silver-using countries, and especially India, should be included in the arrangement. To this proposal also we have not thought it necessary to give a prolonged consideration. Any scheme which involves so great an alteration in our system of currency would be so opposed to the traditions and prejudices of the people of this country, that we think some considerable period of time must elapse before it will have gained that amount of support among the public which will entitle it to be considered as a practicable proposal. 169. A third suggestion is that the system now in force in the Latin Union, the Maintenance United States, and Holland, namely, the maintenance of both metals as legal tender ° -g^j^jj to any amount with free coinage for gold alone, and a large, though limited, coinage boiteux." of silver, should be extended to all countries. From the experience of those countries, it is urged that a considerable amount of silver can be kept in circulation side by side with gold at a rate" greatly exceeding O 3 54 ROYAL COMMISSION ON GOLD AND SILVER : Proposal that thc! Bank of England should hold silver. Proposals of the Italian Government in 1882. Repeal of duty on silver plate. its market value ; and it is contended tbat if their practice were generally carried out, a great additional demand for silver would be created, and its use would be so extended as to keep its value relatively to gold at a more uniform level. 170. "We may here refer to certain proposals of a somewhat similar character which arose out of the proceedings of the International Conference on the monetary question held at Paris 1881. It was then suggested that the fall in the value of silver might be alleviated if the Bank of England would undertake to make use of the power which it possesses under the provisions of 7 & 8 Vict. cap. 32, of holding one-fifth of ^ its bullion reserve in silver ; such an undertaking being coupled with a pledge that the Governments of the United States and of the countries forming the Latin Union would re-open their mints to the free coinage of silver. The Directors of the Bank having been consulted on this proposal pointed out in reply that they were compelled by law to pay all their notes in gold, and that they could not therefore take any step which was likely to infringe this principle ; but that if the mints of other countries returned to such rules as would ensure the certainty of conversion of gold into silver and silver into gold, they saw no reason why they should not exercise the discretion entrusted to them of holding a portion of their reserve in silver, without interfering with the obligation imposed on them by law of receiving gold in exchange for notes and paying notes in gold on demand. 171. In the early part of 1882 a further suggestion was made by the Italian Govern- ment that, failing a bimetallic arrangement, an international agreement might be arrived at on some such basis as the following : — The States of the Latin Union to undertake for a fixed period, say five years, to coin silver annually to the amount of at least half a franc per head of population : The United States of America to coin at least 3,000,000 silver dollars a month during the same period : The Government of India to maintain the unrestricted coinage of silver : The Government of the United Kingdom, to raise the legal tender limit of silver from 40s. to 20L ; to coin a minimum amount of 500,000Z. in silver annually ; and the Bank of England to hold one-fifth of its reserve in silver : The Government of Germany to undertake not to sell any silver for five years, and to substitute silver coins for the gold five-mark pieces and some of the smaller denominations of notes. K'o definite answer appears to have been given to these proposals, and up to the present date they have not been acted upon. 172. A further suggestion for promoting the more extended use of silver, as well as economising gold, is that the half-sovereigns circulating in this country should be called in and notes to the value of 10s, and 20s. each should be issued against silver in place of them. 173. Complaints are also made that the use of silver for industrial purposes is much restricted owing to the duty of Is. 6d. per oz. which is levied on silver plate manufactured in this country or imported from abroad. The duty is said to beai- with special severity upon those branches of Indian industry which are engaged in the manufacture of silver plate or ornaments. Not only does the duty (which now amounts to upwards of 40 per cent, on the value of the raw material) restrict the demand for manufactured silver, but, owing to the Hall-mark regulations, only silver of the authorised standard can be introduced into this country for purposes of trade, the importation of lower grades being prohibited except for private use ; and the rupee standard in India is slightly below the standard required by the Hall-mark regulations in this country, its millesimal fineness beine" 916, as against 925. ^ The repeal of the duty has been repeatedly urged by the Government of India in the interests of those engaged in the industry in that country ; and the amount of revenue which is now raised from it (between 50,000L and 60,000/. per annum) is so small that it could be surrendered without creating any serious disturbance of the financial equilibrium. The main difficulty which is understood to stfind in the way of the repeal of the duty is the question of the drawback to be granted on the plate now in the manu- facturers' hands which has already paid the duty ; l)ut the concession of the drawback I'INAL REPORT. PAIIT I. .IS miglit be limited to a moderate period, say three years, and this difficulty ought not to be an insuperable obstacle in the way of a desirable reform. 174. One common object of all the proposals above described is to meet the difficulties and inconveniences of the existing situation by, promoting the more extended use of silver. Suggestions have also been made for avoiding the existing pressure upon the stock of gold in the world by still further economising its use. The most practical proposal from this point of view is that for the introduction Extension of of a fiduciary issue of \l. notes in this country. fidaciary Such a measure would, it is said, set free a sum estimated at from 8,000,000/. i^^^<^^°* to 20,000,000?. sterling, which would be available to meet the large demand for gold in America and elsewhere. Any result, however, which could be produced by the release of this amount of gold would be very transitory in its effects, even if it be assumed that it would have any influence upon the level of prices or the commercial interests of the world. Considering the many serious questions with regard to our financial policy, and other matters not immediately connected with our inquiry, which would be raised by such a measure, and the very slight effect it might have upon the relative value of the precious metals, we have not thought it necessary to give a prolonged consideration to the proposal or to pronounce a decided opinion upon it. 175. It has further been suggested that the difficulties of the Grovernment of India, Adoption so far as they arise from the difference between the standard of value in that country of a gold and the United Kingdom, might be removed or modified by the adoption of a gold standard m standard in India, while retaining the existing silver currency. The first step towards such a measure would be to raise, by artificial means, the gold value of the rupee to any point which might be decided on, either by stopping the free coinage of silver in India, or by imposing such a seigniorage as would raise the cost of a silver rupee to its gold value; while at the same time British or Indian gold coin would be made legal tender for all payments to the Grovernment concurrently with the rupee at the fixed rate, 176. A proposal of this character was submitted by the Grovernment of India to the Home Government in 1878, and was referred for consideration to a Departmental Committee, who reported that they could not recommend the proposal for adoption. The principal objections which are urged against it are — (a.) That by enacting a gold standard without a gold currency it would be practically equivalent to the establishment of an inconvertible token currency. This difficulty it is said would only be of importance if gold was required for export ; and the flow of the standard metals is at present, and is likely to remain in the direction of India. For internal use the existing rupee currency would be sufficient. (&.) That the closing of the only mint now open to the free coinage of silver might have so serious an effect upon the market value of the metal that it would be impossible to maintain the rate of exchange fixed upon. (c.) That it would not meet the real difficulty of the present situation in India, which is that, owing to the fall in all gold prices, a larger amount of produce has to be exported in payment of gold debts ; and that consequently any apparent gain to the Grovernment of India would be balanced by a corresponding loss to the people of that country. (d.) The danger of illicit coinage, which would be greatly increased if the exchange value of the rupee were raised much above its intrinsic value. To this it is replied that the danger, such as it is, already exists not only in England, but on the Continent ; but it is not believed that any serious amount of illicit coinage takes place. 177. Another proposal of a similar character is to make gold legal tender in India at a rate to be fixed by the Government from time to time. Such a measure would,, it is urged, bring into use for currency purposes the large hoards of gold which are known to exist in the country ; and the ratio, which would at first be fixed according to the market value of the two metals, would gradually tend to approximate to that which sulisi.sted before th^; recenl. divergence. 56 KOYAL COMMISSION ON GOLD AND SILVER: Changes in the supply of the two metals. Changes in the demand. Gold. Q. 1354. Silver. Conclusions as to the Causes of the Divergence in the Eelative Value of the Precious Metals. 178. We will now proceed to state the conclusions to wMcli we have been led by a consideration of. the several arguments set forth in the previous pages. 179. We have pointed out that the phenomena with which we had to deal were (a) extensive fluctuations, and (b) a considerable fall in the gold price of silver, which have manifested themselves since 1873. For forty years preceding that date there was a difference of only 2|cZ. between the highest and lowest annual average price of bar silver in London. Between 1873 and 1887 the difference was 14|(/. Kot only have the variations in price covered this greatly extended range during the later period as compared with the former, but the fluctuations from time to time in the course of a month, or even of a few days, have been much greater. 180. The first point which naturally invites attention as an explanation of the fall in the gold price of silver in recent years is the large increase in the production of silver, coincident with some diminution in the production of gold. The annual average production of the former metal, according to Dr. Soetbeer's estimate, has increased from 1,339,085 kilogrammes, valued at 11,984,800L, in the five years 1866-70 to 1,969,425 kilogrammes, valued at 17,232,450Z., in the five years 1871-75, and to 2,861,709 kilogrammes, valued at21,438,000L, in the five years 1881-85; thus showing an increase between the first and last periods mentioned of upwards of 100 per cent, in quantity and nearly 80 per cent, in value. On the other hand, according to the same authority, the annual production of gold, which averaged 195,026 kilogrammes, equivalent to 27,206,900Z., from 1866 to 1870 fell off to 173,904 kilogrammes, or 24,260,300Z., from 1871 to 1875, and to 149,137 kilogrammes, or 20,804,900?., between 1881 and 1885, a diminution of nearly 25 per cent. 181. In addition to changes in the relative production of the two metals during the last 15 years, there appears to be ground for the allegation that there has been during that period both increased use of gold and diminished use of silver for currency, resulting from changes which were made in the currency systems of various countries immediately before, or during, that period. 182. The amount of gold actually coined in Germany since 1871 has been upwards of 98,000,000?., of which about 80,000,000?. is said to represent the new demand. But a considerable proportion of this new demand appears to ha.ve been satisfied prior to or in 1872 and 1873, as the German coinage in those two years amounted to 50,000,000?. ; and there seems reason to believe that some portion of this gold was taken from hoards of that metal in France which were not previously in circulation It is also to be observed that while in the years 1866-70 the United States retained on an average 2,533,000?. a year out of their own home production, in the period from 1871 to 1875 they exported nearly 1,500,000?. in excess of the quantity produced in the country in those years. The force of the United States demand did not begin to make itself felt until the middle of the year 1877 ; but since that date the use of gold in that country has increased very largely, the value of the metal absorbed during the ten years 1876-85 having been 112,589,600?., as against 11,196,000?. in the 10 years immediatelv preceding. There has also been a certain demand, though of a less important character, owinff to the requirements of Italy, Holland, and the three Scandinavian countries. ' On the whole there can be very little doubt that there has been a considerable increase in recent years in the use of gold for purposes of currency. 183. Turning next to silver, it is very difficult to estimate the extent to which the use of this metal has diminished in Europe and America owing to currency changes No doubt the adoption of a gold standard in Germany diminished the demand for silver in that country ; but on the other hand there has been a very large coinage of silver in the United States during the last 10 years, amounting to upwards of 300,000,000 dollars, while in the 10 years preceding 1873, the currency in that countrv was paper and but very little silver was coined. -^ FINAL EEPC^llT, — PART I. When all the facts are taken into account it seems doubtful whether there has been on the whole any great diminution in the use of silver for currency purposes. 184. The silver placed on the market by Grermany since 1873 is another element which must be taken into account. The amount actually sold and thus added to the supply available for the use of the world was not very large, but the mere fact of the sale and demonetisation even of the amount in question would probably tend to discredit silver, and produce an effect upon the market disproportionate to the amount which was actually sold, if the latter were regarded merely as an addition to the supply. The sales of the Grerman silver, however, practically ceased in 1878 or 1879, and this influence has therefore probably ceased to operate directly since that date, though apprehensions of further supplies being thrown upon the market may have exercised a depressing effect. 185. It cannot be doubted that in the circumstances to which we have called attention, as marking the period since 1873, we see causes at work which would tend to render silver less valuable as compared with gold, and so to diminish its gold price. But it is very difl&cult to measure the force of this tendency, especially when we regard not merely the changes in the relative production and use of the two metals, but the ratio which the increased production of silver on the one hand, or the diminished production of gold on the other, bears to the existing stock of those metals respectively. 186. It must be borne in mind that in the case of other commodities the effect of Precious changes in the supply and demand is both more marked and more immediate. '^*^^^."/*'^ These commodities are generally produced for the purpose of consumption at an cjjano-es in early date or within a comparatively short period. The supply at any time available suppfj and for the market, or capable of being placed on it at short notice, is therefore a very demand in important element in the process by which its value is fixed. *^® ^'^'"^th The precious metals on the other hand are but to a slight extent consumed, and ^"^niodkies^ the available supply consists of the accumulations of previous years. It follows, therefore, that in their case a diminution or an increase in the new supply is of less importance than in the case of consumable articles, and that an increase or diminution in demand has also a smaller effect. The important considera- tion with regard to them at any one moment is rather the relation between the total stock then in existence and the then existing demands upon it. 187. When we examine the marked contrast which the period prior to 1873 presents Reasons for to later periods, and the extensive changes in ^ the relative production of the two thinking that metals which took place during the earlier period, it seems impossible to conclude that ''li^^ps ^^ the circumstances connected with the supply sufficiently account for the altered condi- insufficient tions in the relative value of silver and gold since that date. to account In the 40 years between 1833 and 1873, which include the period of the great gold for diver- discoveries, and the consequent increase in the available supply of that metal, but ^^^ ^^ , , little change in the gold price of silver can be observed. and silver. In the 10 years from 1831 to 1840, the proportion which the value of the silver pro- duced bore to that of the gold was as 1'86 to 1. In the five years from 1851 to 1855, the proportion had fallen to "288 to 1. *Yet the market value of silver only varied between 15'75 to 1 in the former period, and 15-41 to 1 in the latter. On the other hand, if we compare the five years 1871 to 1875 with the five years 1876 to 1880, we find that the proportion borne by the production of silver to that of gold was •710 to 1 in the first period, and '794 to 1 in the latter. But this change, almost insignificant when compared with those to which we have called attention above, coincided with a fall in the market value from 15-97 to 1 to 17-81 to 1. 188. Examining the figures a little more closely, and taking the statistics of produc- tion for each year which were laid before the Select Committee of the House of Commons on the Depreciation of Silver by Sir Hector Hay in 1876, we find that from 1861 to 1872 the annual production of gold had been diminishing from 22,760,000L to 19,910,000Z., while that of silver had increased from 8,540,000L to 13,050,000L, and that this important change took place without any great variation in the gold price of silver. The average price of bar silver in the former year was 60]^d. and in the latter 60^d. It is true that since 1872 the changes in the demand for the two metals have taken place which we have dwelt upon above; but an increase or diminution of demand would not be likely by itself to have a greater effect upon the relative value of the two metals than an increase or diminution of supply to the same extent. H ;J613G. KOYAL COjr^MlSSION ON GOLD AND SILVER: Marked difference ia fluctuations in recent years. Pirst report, Appendix I. 189. Looking, then, to the vast changes which occurred prior to 1873 in the relative production of the two metals without any corresponding disturbance in their market value, it appears to us difficult to resist the conclusion that some influence was then at work tending to steady the price of silver, and to keep the ratio which it bore to gold approximately stable. 190. There is another fact, to which we have already drawn attention, pointing decidedly in the same direction. Prior to 1873 the fluctuations in the price of silver were gradual in their character, and ranged within very narrow limits. Thus in the year 1872 the margin between the highest and lowest quotations in each month was as under : — d. January - - - - i per oz. February March April - - May June - - - ' Julv 3. 8 X 8 5. 8 7_ 16 1 a 8 August September October November December i 8 1. 4 X 2 X s While in the year 1886 the corresponding figures are as follows ; d. January February March April May - June July August September October November December 9 ■ TB" 7 - T¥ 3 - T'B- li 1 6 - li ij 1 6 5 "S - 2^- s - If - H - It per oz. Effect of the existence of tlie bimetallic law in the Latin Union. it will be observed that the maximum variation in the former year was f (Z., and the average not quite -x-^d., while in the latter year the maximum was '2^d., and the average nearly \\d. It has not been, and indeed hardly could be, suggested that this difference can be accounted for by changes in the relative production or actual use of the two metals. 191, The explanation commonly offered of these constant variations in the silver market is that the rise or depression of the price of silver depends upon the briskness or slackness of the demand for the purpose of remittance to silver-using countries, and that the price is largely affected by the amount of the bills sold from time to time by the Secretary of State for India in Council. But these causes were, as far as can be seen, operating prior to 1873, as well as subsequent to that date, and yet the silver market did not display the sensitiveness to these influences from day to day and month to month which it now does. 192. These considerations seem to suggest the existence of some steadying influence in former periods, which has now been removed, and which has left the silver market subject to the free influence of causes, the full effect of which was previously kept in check. The question therefore forces itself upon us : — Is there any other circumstance calculated to affect the relation of silver to gold which distinguishes the later period from the earlier ? Now undoubtedly, the date which forms the dividing line between an epoch of approximate fixity in the relative value of gold and silver and one of marked instability, is the year when the bimetallic system Ivhich had previously been in force in the Latin Union ceased to be in full operation; and we are irresistibly led to the conclusion that FINAL REPOET. — PART I. 59 the opej^ation of that system, establislied as it was in countries the population aiu] commerce of which were considerable, exerted a material influence upon the relative value of the two metals. So long as that system was in force we think that, notwithstanding the changes in the production and use of the precious metals, it kept the market price of silver approximately steady at the ratio fixed by law between them, namely, 15^ to 1. When once the conclusion is arrived at that this was the case, the circumstances on which we have dwelt as characterising the period since 1873 appear amply sufficient to account for the fall in the price of silver, tending as they all do in that direction ; and the fact that on any particular day the supply of silver and of Council bills may be large while the need for remittances is small, and vice versa, would explain the constant fluctuations in the price of silver which have manifested themselves in recent years. 193. Nor does it appear to us a priori unreasonable to suppose that the existence in the Latin Union of a bimetallic system with a ratio of 15J to 1 fixed between the two metals should have been capable of keeping the market price of silver steady ;it approximately that ratio. The view that it could only affect the market price to the extent to which there was a demand for it for currency purposes in the Latin Union, or to which it was actually taken to the mints of those countries is, we think, fallacious. The fact that the owner of silver could, in the last resort, take it to those mints and have it converted into coin which would purchase commodities at the ratio of 15|- of silver to one of gold, would, in our opinion, be likely to affect the price of silver in tlit; market generally, whoever the purchaser and for whatever country it was destined. It would enable the seller to stand out for a price approximating to the legal ratio and would tend to keep the market steady at about that point. 194. It has been urged that during the earlier of the two periods which we have been contrasting, the conditions which existed from time to time were favourable to the maintenance of the legal ratio ; that the great influx of gold towards the middle of this century found France with a large stock of silver, and that this silver, owing to exceptional circumstances, had a ready outlet to India. But we do not think this affords an adequate solution of the problem without taking into account the existence of the bimetallic system. It may be true that the circum- stances referred to were conditions which helped to make the bimetallic system operative. But, as we have observed before, circumstances and conditions of a like nature have been more or less operative both before and since 1873, and yet the effect on the relative value of the two metals has been very different. 195. It is said that the altered circumstances since 1873 would have rendered it Question impossible to maintain silver at the former ratio, even if the Latin Union had not whether the abandoned the free mintage of silver, and that sooner or later the bimetallic system tumetallic must have broken down and its steadying influence have ceased. haveteen" '' To estimate the force of causes without adequate experience of their effects in the maintained past is a matter of extreme difficulty. But even if it were true that the Latin Union since 1873. would not have been able down to the present time to preserve silver from falling below the legal ratio, this does not prove that the views which we have propounded as to the causes of the former stability of the gold price of silver and of its present unstable condition, are incorrect. "Whether silver would ultimately have fallen to its pi-esent price, and whether the Latin Union could now, by reversing its action and re-opening its mints, restore silver to its former gold value, and re-establish the former condition of stability, are questions very material to another part of the case, but the determination of which is not essential to the particular point with which we are now dealing. 196. It is also said that such effect as the bimetallic system has had in keeping the relative value of gold and silver steady was due to the accidental circumstance that, at the time of the gold discoveries, France was saturated with the appreciating metal silver ; and that if the discoveries had been of silver and not of gold, France, having no gold to part with, could not have kept down the silver price of gold or have kept up the gold price of silver. To this our answer is that we are for the moment concerned with what has actually happened, and that for our present purpose we need not consider what might have happened had the circumstances been different. il 2 60 ROYAL COMMISSION ON GOLD AND SILVER: Divergence 197. It has been suggested that the fall in the price of silver is to be accounted for in value of exclusively by the appreciation of gold m relation to all commodities, arising from Ilver*cannot iiicreased demand for that metal, or, as it is put by some advocates of the view be accounted owing to a contraction of the currency which has caused all prices to fall, for by appre- "We shall have to discuss hereafter the questions of the suggested appreciation of gold ciation uf ^^g^ contraction of the currency ; but dealing with them now only as an explanation of ^° * the fall and fluctuations in the gold price of silver, we have no hesitation in saying that, in our opinion, they cannot be regarded as of themselves adequate to account for the phenomena we have witnessed. If gold be now appreciated, in relation to commodities generally, owing to diminished production, it is equally clear that it was depreciated m relation to com- modities at the time of the large gold discoveries of 30 or 40 years ago ; and yet the gold price of silver did not then rise with that of many other commodities. Why then, even assuming the appreciation of gold in relation to commodities generally, should the reverse process take place now, unless some condition existed then which is absent now ? If the active maintenance of the legal ratio iu the Latin Union had the effect which we are disposed to attribute to it, the difference between the two epochs would, even on the assumption with which we are now dealing, be accounted for. Summary of 198. To sum up our conclusions on this part of the case, we are of opinion that the conclusions, true explanation of the phenomena which we are directed to investigate, is to be found in a combination of causes and cannot be attributed to any one cause alone. The action of the Latin Union in 1873 broke the link between silver and gold which had kept the price of the former, as measured by the latter, constant at about the legal ratio ; and when this link was broken, the silver market was open to the influence of all the factors which go to affect the price of a commodity. These factors happen since 1873 to have operated in the direction of a fall in the gold price of that metal, and the frequent fluctuations in its value are accounted for by the fact that the market has become fully sensitive to the other influences to which we have called attention above. 199. Down to this point we have been able to maintain an agreement among ourselves as to the terms of our Keport ; but in considering our conclusions on the (Question to what extent the fall in the gold price of silver has taken the form of an appreciation of gold or a depreciation of silver, as well as on the remaining questions submitted to us, such a divergence of opinion manifested itself that we have found ourselves under the necessity of stating our opinions in the separate documents which follow. Before, however, we pass from our statement of the conclusions upon which we are agreed, we desire to express the sense which we all entertain of the high value of the services rendered to the Commission by the secretary, Mr. G. H. Murray. His zeal and ability have greatly assisted us in our labours. All which we humbly submit for Your Majesty's gracious consideration. (Signed) HEESGHELL. LOUIS MALLET. ARTHUR JAMES BALFOUR. HENRY CHAPLIN. C. W. FREMANTLE. JOHN LUBBOCK. T. H. FARRER. W. H. HOULDSWORTH. D. BARBOUR. J. W. BIRCH. LEONARD H. COURTNEY. SAMUEL MONTAGU. Geo. H. Murray, Secretary. October 1888; FINAL REPORT. — PART IT. 61 PART II. 1. The question "whether the change in the relative value of gold and silver is due rather to appreciation of gold or depreciation of silver is so much involved in the consideration of the fall of prices, "which is said to be connected "with that changed relation and with the circumstances which have led to it, that in order to avoid repetition we have thought it convenient to defer the discussion of this question to a later part of the report. Our conclusions with regard to it will be found below in §§ 47 and 71. Conclusions as to the Evils said to have resulted from the Changes in the Relative Yalue of the Precious Metals. 2. We "will now proceed to consider the evils which are said to have resulted from the recent changes in the relative value of the two metals. "We have already drawn attention to the fact that the phenomena observable have been, that constant fluctuations in the relative value of gold and silver have taken the place of approximate fixity, and that there has been on the whole a considerable fall in the gold price of silver. 3. It is alleged that both the fluctuations and the fall have been followed by serious and embarrassing consequences. In dealing with this part of the case we shall, as far as possible, treat separately the evils which are traced to the fluctuating character of the relation between the two metals and those which ai'e alleged to have their origin in the fall in the gold price of silver, or in circumstances which have affected or are affecting the two metals and their relation to one another. It is not easy, and indeed not always possible, to preserve this distinction ; as the consequences alleged to flow from these causes touch at so many points and are so closely connected. I. Evils resulting from Fluctuations. 4. We will consider first the effects of the change from a fixed to a fluctuating relation between the two precious metals ; for we are here on less debateable ground, and the views presented to us differ rather in their estimate of the extent and importance of the effects produced, than as to the existence of the effects. 5. The most obvious of these is the inconvenience which arises in the exchange Difficulties between gold-using and silver-using countries. betweenS This is no doubt reduced to a minimum by the action of exchange banks and and silver telegraphic transfers. Where the currents of trade in opposite directions between the using coun- two countries are more or less constant and uniform, the risk to the exchange banks ^"®^- in undertaking these transactions is but small, however frequent the fluctuations. They ^Extent to are therefore able and willing to undertake them without any very burdensome cost ^^^^^ ^^^^ to the trader. avoided. Where, however, the counter currents of trade are less constant, as is said to be the case between this country and China, the burden imposed on commerce is no doubt at times somewhat greater. 6. It must be borne in mind that the fluctuations in exchange, even in a single day, have of late years often been considerable, and inasmuch as it is not always possible to close the transaction on both sides, and make the settlement of the exchange simultaneously, some risk to the merchant is at times inevitable. Besides this it is said that the exchange difiiculty tends to limit trade, and to restrict ifc to those cases in which a contract of sale and purchase can be made in the two countries at the same time. It has been stated that in the trade between Chili and England, there has been a tendency, owing to exchange difficulties, to diminish trading upon credit, and to substitute cash transactions, and that this has the effect of contracting the commerce between the countries within narrower limits than would otherwise be the case. Chili has a depreciated paper currency, but the fact is used as an illustration of the commercial disadvantages arising generally from fluctuations in exchange between gold-using countries and those possessing a currency which is depreciating in relation to that metal. H .s 62 ROYAL CUJIMTFSION ON GOLD AND SILVER; Extent to which trade has been affected by these diffi- culties. Variations in exchange tend to pro- mote trade between countries having the same stan- dard to the exclusion of others, 7. It must also be remembered that there are certain risks which arise from, or are aggravated by, the fluctuations of exchange, and against which a merchant cannot practically protect himself by any of the expedients to which we have referred. Obstacles, for example, sometimes arise to prevent a contract being carried out at the appointed time ; and there are cases in which this would be of comparatively little moment if the exchange were stable, but in which the merchant may be subjected to a serious loss if, with a heavy fall of exchange in the meantime, the purchaser is enabled to refuse to receive the goods. 8. Some witnesses representing the trade of Lancashire have deposed that when a heavy fall in the exchange takes place the trade in cotton goods is sometimes brought for a short time almost to a standstill. Statistics do not appear to afford evidence in support of the view that trade between this country and India has been diminished from this cause. The exports to India have increased at a greater rate than those to gold-using countries. This statement is, however, open to the criticism that this expansion of trade is partly due to obvious causes, such as the development of railways and the removal of import duties in India, and the operation of protective tariffs in certain foreign countries, and that it would have been greater still if the exchange had remained steady. It must further be admitted that there has not been a similar expansion of the exports from this country to China. It must be borne in mind, however, that this is to some extent accounted for by the growing competition of Indian exports of cotton goods to China, and of Indian with Chinese tea in the English markets, which would both tend to diminish the export of goods from this country to China. And it must be noted that there has been of late a large increase in our exports of cotton goods to that country. 9. However much opinions may differ as to the extent of the evil arising from the increased difficulty which a fluctuating exchange interposes, we do not think its reality is open to question. We are not ourselves disposed to regard it as having hitherto limited or burdened to any very serious extent the commerce between this country and those having a silver standard. Nevertheless everything which hampers complete freedom of commercial intercourse between two countries, or which imposes on it any additional burden, is undoubtedly an evil to be avoided or removed if possible. 10. If, therefore, a remedy could be devised to accomplish this end, without involving the risk of other disadvantages, there cannot be two opinions that it would be worth while to apply such a remedy. Whether it is serious enough, taken by itself, to render it advisable to apply any remedy from which some risk is inseparable must depend on the nature of the particular remedy, and our estimate of the severity of the risks it would entail, as compared with the gravity of the existing evil. Our views upon this point will appear when we come to discuss the expediency of adopting the remedies which have been "suggested. 11. Two other evils of a general character are also attributed to fluctuations in the o-old value of silver, though, as regards one of these, the prejudicial effects are said to have affected gold-using countries more particularly. It is alleged that an unstable exchange between gold and silver has tended to foster trade between countries having the same standard to the prejudice of those having a different standard. 12. It cannot be denied that the trade between two countries havino- the same standard (or, what is practically the same thing, having different standards maintainino- a stable relation to each other) is free from an obstacle, and to some extent a burden" to which trade is subject between countries having different standards varying iii their relation to one another ; and it may reasonably be assumed that whenever international trade is simpler in its operations and less burdened, it will have a tendency on that account to make better progress, and this to the detriment, it may be, of countries less favourably circumstanced. ' "^ It is alleged that practical proof of this is afforded by the growth of the trade in cotton yarns between India on the one hand, and China and Japan on the other in recent years as compared with our trade in that commodity with the latter countries This result is however attributed, even by those who attach weight to the aro-ument more to the fact that the fluctuations have on the whole been downward m their direction than to the mere fluctuations themselves. FINAL REPORT. — PART 11. tjH We will therefore defer the consideration of this point until a later period ; merely observing that though the difficulty of an unstable exchange may have a tendency to foster trade between countries having the same standard, as against trade in the same commodities between countries whose standards have not a fixed relation, we do not think, all other things being equal, that its effect in this direction is likely to be very considerable. It must be noted that alterations in the supply of one or other of the precious metals which, when no bimetallic link exists between them, cause or intensify fluctuations of exchange between gold and silver-using countries, might, if the relations between the metals were fixed, operate, though by a process slower and less severe, upon prices, and thus affect contracts or engagements , to be performed or fulfilled at a future time. 13. The second evil upon which stress has been laid is that a fluctuating exchange and to dis- is alleged to discourage investment by gold-using countries in silver-using countries, courage from which both sustain injury, the gold-using country losing an outlet for its ™p™aliii surplus capital, and the silver-using country being deprived of that development which silver-using the employment there of such capital would produce. countries. There are many, it is said, who are unwilling to invest money except when it yields a fixed or approximately fixed return, and, owing to the apprehensions of fluctuations in the relative value of gold and silver, this class of persons do not invest in India or China. This again is closely connected, by those who urge the point, with the circumstance that the faU in the gold value of silver aggravates the evil, and renders the person having capital to employ less willing to invest it there. It is said too that the Government of India are unwilling for the same reason to undertake public works to the extent to which they otherwise would. We think there is truth in the view thus presented, though it is very difficult to gauge the extent to which a real influence is exerted in hindering investment in silver- using countries ; especially having regard to the fact that English capital has been invested in the Indian mills whose competition is complained of, and that a large amount of English capital has been and is being invested in South America. 14. In addition to the evils of a general character to which we have drawn attention. Embarrass- there is one specially affecting the Grovernment of India which deserves the most ^^^'*' caused careful attention. ' l°ernme?t"of We allude to the effect upon the Indian finances of the obligation of the Government India, of that country to pay every year the interest on their gold debt, as well as to meet other fixed gold charges, while all their taxes are imposed and received in silver. 15. It is obvious that a fluctuating exchange must in consequence be the cause of serious embarrassment to the financial policy of the Indian Government. The estimates of receipts and expenditure may be prepared with the utmost care and accuracy, and yet an estimated surplus may become a deficit by a sudden fall in the exchange. So long as these fluctuations continue it is impossible to count in any year upon a financial equilibrium ; and the peculiar circumstances of our position in India render it specially difficult to make constant changes in the taxation imposed upon the people. The difficulty is of course intensified when the ultimate or general tendency of the exchange is continuously downwards, and the revenue can only be made to balance the expenditure by increased taxation, which it is very difficult to devise. Even if the assumption be well founded that the change is due to a fall in the value of silver, and that, the taxes in India being payable in rupees, a fall in the value of silver is in fact a diminution of taxation, and is therefore a relief to the people of India, it nevertheless constitutes a difficulty for the Government itself. 16. Putting aside the difficulty which has already arisen from a fall in the past, there can be no doubt that the uncertainty created by the want of a fixed ratio, the apprehension of a further fall, and the impossibility of determining to what point that fall may reach, do make the task of the Government of India a very difficult one, and constitute a real and very serious evil. We have been much impressed by the views which have been urged upon us by the Government of India. We understand that they regard the re-establishment of a fixity of ratio between gold and silver as of even greater moment than the restoration of silver to its former value as compared with gold. We fully share their view as to the great importance of the subject, and the great advantage that would result to the Indian Government, with whose safe administi'ation H 4 ROYAL COMMISSION ON GOI.D AND SILVER: Evils con- nected with fall in gold price of silver. Fall in gold prices due to appreciation of gold. Extent to which it falls within the scope of this inquiry. Absolute stability of the standard unattainable. of the affairs of that great Empire the interests of this country are so intimately connected, if a stable ratio between gold and silver could again be relied upon. 11. Evils connected with the Changed Relation of Silver to Gold. 17. "We have next to consider the evils attributed to or connected with the altered relation of silver and gold, other than those which result from fluctuations in exchange between gold and silver using countries. These evils are, fii'st, the effects upon the commerce of the country, and the relation of debtor and creditor, alleged to be due to the fall in the price of com- modities ; and secondly, the special diflBculties which have arisen in connexion with the finances of India, owing to the fall in the gold price of silver. 18. Two explanations have been offered of the connection between the fall in the price of commodities and the altered relation of gold and silver. One is that which attributes the fall in the price of commodities directly to the fall in the gold price of silver ; the other is that which connects the fall with the appreciation of gold, which, it is suggested, has arisen in recent years from the diminished production of that metal, and its increased use owing to the currency changes which have occurred during that period, as well as to an increase of demand for it caused by, and indirectly due to, the results of those changes. 19. We will deal first with the latter point. There can be no question that the gold price of many, and probably of most, commodities has fallen during the last 15 years. In relation to these commodities it may, no doubt without inaccuracy, be said that gold has appreciated. That is another mode of expressing the fact that their price is lower. It may, however, also without inaccuracy, be said that in relation to gold these commodities have depreciated. Which is the more accurate expression in any particular case will depend upon whether the altered relation of the commodity to gold has arisen from some change which has affected gold, such as a diminished supply, or some increase of demand owing to its use for purposes for which it was not formerly employed, or Tfhether this altered relation is connected with a change affecting the commodity, such as increased supply or diminished demand. It may, however, have arisen partly from one and partly from the other, so that the true explanation of the fall in price may be that there has been both appreciation of gold and depreciation of the commodity. 20. It is only in so far as the fall in price is due to circumstances affecting the standard of value that it comes within the scope of our inquiiy. A fall in the price of commodities which results from an increase in their supply or a diminution in the cost of their production or transit does not appear to us to be of itself an evil, and if it were so it is one foreign to the subject which is referred to us for consideration and report. 21. There are indeed some who think that in an ideally perfect system of currency, whatever may have been the cause of an alteration in the relation of the standard to commodities, the standard ought to adjust itself to this variation, so that prices should remain co^istant. They point out that otherwise contracts to pay money at a future date are affected to the prejudice either of the creditor or the debtor by the change in the purchasing power of the standard ; that the obligation, which ought to remain constant, varies in reality with its greater or less purchasing power. It may be questioned whether the strict idea would not require that the constancy of obligation aimed at should be to render the same labour rather than to transfer the same commodities, so that the sacrifice of toil in repaying an obligation should be the same as that which was involved in its creation ; but apart from this abstract criticism of an abstract theory there are practical difiiculties opposing it. The view presented would not be without its force if all commodities and services changed in their relation to the standard simultaneously and pari passu, but this never has been, and practically never can be, the case, where the change arises from circumstances operating upon the different commodities themselves. Even if it were practicable to adjust the standard in correspondence with an increase in the supply of any class of commodities or services, the result would be to alter its relation to things not comprised within that class the supply of which either had not been increased, or not to the same extent, and thus to bring about the very evil which it was sought to remedy. FINAL REPORT. — PART II. 65 In our opinion, therefore, we must dismiss this theory from consideration, and devote our attention exclusively to the question how far the fall in the price of commodities is due to currency changes. 22. Eeliance is placed, by those who contend that the lower prices which now Evidence prevail are due to the appreciation of gold, upon the index numbers which have been °^ i""!^^ prepared by different authorities, to indicate the general course of prices. numbers. We have already drawn attention in §§ 60, 61 to the reasons which enforce caution Report, in the use of this method of generalisation ; but we may in addition draw attention ^^'^^ ^■ to the fact that, taking Dr. Soetbeer's table, the index numbers for the years between 1874 and 1883 were, with the exception of that of 1879, in each case as high as, or higher than, those of the years 1858 to 1861 inclusive, and that the number for each of the years 1880, 1882, and 1883 differed by less than one per cent, from those of the years 1865, 1868, 1869, and 1870. If, however, we turn from these general index numbers and examine the index numbers of the several commodities which have been taken into account in arriving at the general index number for the year, it cannot be doubted that a fall has taken place, especially in the most recent years, in the majority of the commodities in common use, and that in some cases the fall has been very heavy. 23. The index numbers, as has been observed, take no account of the price of Rate of labour or services, or of the rent of houses or land. wages. The facts with regard to wages, even in this country, are very difficult to ascertain. The report of the Royal Commission on the Depression of Trade (1886) in referring to the last 20 years states (para. 83) that, while during that period wages have risen, profits have fallen, and (para. 81) that " there is no feature in the situation which the " Commissioners have been called to examine so satisfactory as the immense improve- " ment which has taken place in the condition of the working classes during the last " 20 years." These conclusions, formed after a long and patient inquiry, though they deal with real rather than nominal wages, and relate to a period dating back to 1866, are scarcely consistent with the conclasion that the money wages of the labouring classes in general have, been seriously diminished by the monetary changes which took place in and subsequently to 1873. Since the date of the report in question there has in this country no doubt been further depression, especially in the employment of agricultural labour, and this depression has tended to depress other branches of the labour market. But although nominal wages have undoubtedly fallen in certain departments of industry, we have no evidence to show that they are generally lower than they were 15 years ago ; and the reports of the Labour Correspondent of the Board of Trade show that during the past 12 months there has been a steady improvement in the skilled labour market, both as regards the rate of wages and the numbers employed. We have no statistics of retail prices, but there can be little doubt that though Retail they have fallen considerably, the fall has not been so great as in the c^se of prices, wholesale prices. This again points to the fact that wages have not fallen to anything like the same extent as the wholesale price of commodities, for the wages of labour are an important, if not the most important, element in determining the difference between wholesale and retail prices. There does not appear to be any evidence that the salaries of clerks and others, Salaries outside what may be termed the wage-earning classes proper, have decreased, and ^^^ ^°^^^ although some house rents have fallen^ it seems questionable whether, except as ^®°^' regards the more expensive class of houses which are inhabited by the wealthy, there has been any general diminution of house rent. 24. At the outset of our investigation we are confronted by the fact that the fall Fall neither in prices has been neither universal nor uniform. _ It will be seen that it did not universal nor commence as regards all commodities, even approximately at the same time, nor has crnn°o™there- it proceeded at the same rate or to the same extent. fore be A fall of prices arising from the appreciation of gold alone must, other things entirely due remaining the same, ultimately be both universal and uniform. tion^rf thl**" But it has been pointed out by some economists, and notably by Professor Cairnes, standard, that alterations of price due to a change in the standard (he was speaking of the depreciation of gold after the great gold discoveries) do not and are not to be expected to affect all commodities at the same time. In the case of the depreciation of gold arising from the gold discoveries, a most potent factor in the raising of prices was A 5G136. I 66 KOYAL COMMISSION ON GOLD AND SILVER : found to be the rise in wages whicli was brought about, with its consequent effect upon the prices of commodities in the production of which labour was one of the elements. Reasons were also suggested why the rise of price was not uniform in the case of all commodities. It was pointed out that the price of animal would be affected at an earlier date than that of vegetable products, inasmuch as the latter could be increased in quantity to meet an increased demand with greater rapidity than, the former. In the case of the suggested appreciation of gold, which we are now considering, the fall in the price of commodities has certainly not come about from a fall in the cost of labour, and the various products have not been affected in the same order. We have had no sufficient explanation offered of the phenomena which have manifested themselves, assuming them to be entirely due to appreciation of the standard. It has not been shown why its effect upon the various commodities has been so different in point of time, and of extent ; and a careful survey of the varying prices of commodities at once suggests that, even if there has been an appre- ciation of the standard, some other causes must have been at work, affecting particular commodities, so as to depreciate them in relation to gold. Eeport, "We have in § 61 of the foregoing report drawn attention to the fact that if the Parti., § 61 period from 1881 to 1885 is compared with the period 1866 to 1870, which shortly '"■•' preceded the occurrences alleged to have resulted in the appreciation of gold, the classes which include animal food and fruits, oil and wine, rose in price, whilst colonial produce remained stationary, a fall being exhibited in agricultural and mineral produce and textile materials. Again turning to Mr. Sauerbeck's classification of his index numbers we find that while, with the exception of the yeai'S 1877 and 1878, the fall in the price of vegetable food products was continuous from 1873 to 1885, and in the latter year was very rapid, the price of animal food was, with the exception of 1879, as high or higher in every year between 1872 and 1883 than in 1872, and the fall has only manifested itself since the latter date, and that not to an extent at all comparable to the fall in the price of vegetable food. There has recently been a rise in the price of many important commodities, and also in freights, which certainly receives no adequate explanation from any change in the supply of or demand for gold. It cannot be contended that there has been, of late, anything to cause a substantial depreciation of that metal. 25. We do not think that the causes, other than those relating to the standard, which have been operating to produce a fall of price, are far to seek. When we examine the case of individual commodities we see factors at work which fully account for a fall in their price, even if the standard had remained, so far as it was itself concerned, stable. Take for example the case of wheat. The increase in the supply during recent years in many parts of the world, but especially on the American continent and in India, has been enormous. This has been due in a great measure to the fact that vast territories, consistino- in some cases of virgin soil, have been opened up by the construction of railways, and become the means of creating supplies largely in excess of the needs of those engaged in their production. In addition to this the cost of transit fi;om these countries to other parts of the world has very much diminished. The development of railways to which we have alluded has proceeded with striking rapidity during the last 15 years,* especially in America and India, and in the latter case the opening of the Suez Canal has exercised a great influence in the same direction. The diminished cost of transport is also partly due to increased competition for the carrying of goods. Shipbuilding has at times proceeded at a greater rate than the increase of the commodities to be carried. Not only so, but the same quantity of wheat can now be carried, owing to improvements in machinery, with less expenditure of fuel and the employment of considerably less labour. All these things contribute to enable the markets of the world to be stocked much less cost, and the wheat thus to be sold at a lower price. 26. What has been said with regard to wheat may also be said in varyino' decrees with reference to many other commodities. The total output of coal and mineral ores, for example, has exhibited a remarkable increase, and in the case of metals * Down to the eud of 1873 about 70,250 miles of railway had been constructed in the United States From a table in the Economist of Jan. 21, 1888, it appears that during the last 14 years, ending 1887 no less than 80,300 miles have been added. In India there were about 5,400 miles of railway in March 1873' whilst on the 31st of March 1887 there were no less than 13,390, .and, on the 31st of March 1888, 14,383 miles Other causes which have operated to produce a fall. at FINAL REPORT. — PART II. 67 invention has conduced enormously to economy in the cost of production. It is true that the output of coal in this country has in the last two or three years been arrested or diminished ; but this may be attributable to increased economy in the use of coal for industrial purposes, and to the restrictions placed by many foreign countries upon the importation of coal and iron (which largely aifects coal) ; and these causes have tended to aggravate the decline in prices. It has been said, and it may be with truth, that the development of machinery was as great in the 15 or 20 years which preceded 1874, as in the subsequent years, and that steam transport had been also largely developed in the earlier period. But not only has the actual extension of railways and the cheapening of land and sea freight been greater in the subsequent years, but the effect of railways which had been previously made has been more felt. As above noticed, large new districts of great natural fertility, and rich in minerals, have been opened up, and consequently civilized countries have been furnished with an tmprecedented quantity of raw vegetable and mineral products. The rise in the price of raw products during the period preceding 1875, exceeded the average rise of the prices of all commodities, while the fall in the prices of raw pro- ducts since 1875 has been above the average fall. Comparing therefore the earlier with. the later period, the lower cost of manufacture was in the earlier period counteracted hj the higher cost of raw materials, whilst in the later period, not only was this not the case, but the cost of the raw materials has decreased simultaneously with the diminished cost of manufacture. 27. It may be well here to point out that the fall in wages which has occurred, as we have stated, in certain industries in this country is, in some cases at least, largely accounted for by the fall in the price of the product of labour. Take for example agricultural wages. There can be no doubt that, even if other circumstances were equal, the wheat growers of this country compete at a great disadvantage with those whose conditions of soil and climate are better ; and when the price of wheat falls, and their margin of profit is diminished, or even disappears, they resort necessarily to an economy in their expenditure upon labour, and inasmuch as some land goes out of wheat cultivation altogether, and the labour market becomes overstocked, there is the less difficulty in their forcing wages down. It may be noted too that this again would re-act upon prices, especially upon the prices of some kinds of food and textile fabrics used for clothing. The diminution of wages means a diminution in the purchasing power of the wage-earning classes, and therefore operates in this direction. 28. Other causes which have contributed to the fall of prices are referred to in Eeport, § 61 (c). To these we may add the increasing tendency in late years to do business I'art I. in a more direct manner than formerly, and to dispense with the services of middlemen and intermediate agencies of all kinds, thus effecting great economies in the cost of distribution. Another cause, too, which has tended to lower certain prices in the open markets from which the index numbers of prices are taken, has been the increase in protective tariffs. Those tariffs by enabling manufacturers to demand high prices at home, have, in so doing, enabled them to throw their productions at an unnaturally low price upon foreign markets. In the case of bounties, e.g., those on sugar, the operation of protection upon prices has been more direct ; and even in protected countries, while the first effect of protection has been to raise prices, the ultimate effect has been in many cases to produce a glut and make it difficult for the protected industries to get rid of their stocks. 29. It is asserted by some that if the circumstances affecting each commodity the price of which has fallen were separately considered, the fall which has taken place would be amply accounted for. We do not think it necessary to pursue the examination into the case of each commodity the price of which has been depressed in recent years. It will be sufficient for the moment to say that it can hardly be disputed that causes altogether apart from the currency have unquestionably been at work, tending to diminish prices. "We may refer to the extraordinary development of the productive and industrial resources of the United States which has taken place since the conclusion of the civil war. The cessation of that struggle set free the energies of the people, and enabled them to devote themselves without impediment to increasing the productive and industrial resources of their country. T 2 68 ROYAL COMMISSION ON GOLD AND SILVER: "We may add, too, that, as compared with previous periods, there has been a remarkable freedom from the absorption of the people of the continent of Europe in operations of war. Their energies have thus been turned instead to industrial and commercial pursuits, which has led to an increase in their power of production. 30. It is argued that a fall in the price of one article arising from the increased or cheapened production of that article, would be followed by a rise in the price of other articles, since those who save money in one direction have more to spend on other commodities. But we do not think this would necessarily be the case to any considerable extent. When a commodity becomes cheaper it may fall within the reach of some who were unable to procure it at all before ; and to a far greater extent there is likely to be an increased consumption on the part of those who were obliged to be content before with a smaller quantity. Many, therefore, may spend on the article, cheaper though it be, as much as they did before, and have no more to spare for other commodities. Cheaper bread and tea and clothing, for example, have certainly led, on the part of the masses of the people, to increased consumption. If it be said that there are some whose needs were before fully supplied, their number would not be great in proportion to the whole population, and in their case the money set free would probably either result in accumulation or in an increased expenditure upon luxuries. And there seems reasoQ to believe that of late years such accumulations, as well as expenditure upon luxuries, have increased. But besides this, there can be no doubt that a fall in the price of one article often induces a fall in the price of another for which it may be substituted. Prices thus re-act on one another. And a simultaneous fall in the price of many important articles of consumption tends to check speculation and thus to cause a further and more general fall. 31. "We ought also to notice that the years immediately preceding 1873 were a time of great speculative activity. The prices of some commodities, e.g., coal and iron, rose rapidly to an abnormal height. And the large loans to foreign States during the period in question, though much of the money subscribed may have been intercepted by speculators, led to a considerable demand for materials for the construction of railways and other industrial undertakings. As soon as further loans were checked by doubts as to the security offered by the borrowing States, these demands naturally diminished or ceased. Experience, too, shows that a period of excessive speculation is always followed by a period of exceptional depression. The observation, however, is a fair one, that in the present case the depression has lasted longer and been more severe than was to be anticipated from the experience of former occasions when depression has been the outcome of over-speculation. Some articles 32. "We may observe in passing that it may fairly be asked of those who deduce have uot from the evidence afforded by variations of price, the conclusion that the standard has pricT. '"^ appreciated, how they explam the fact that in the case of some articles there has been no fall of price at all. The onus would appear to be on them to show how it has come about that the price of these articles has, on their hypothesis, so greatly risen "We do not think any complete answer has been given to this inquiry. Economies 33. Those who maintain the view that there has been an appreciation of o-old do opefate ^ States, or of England and Australia. nited PINAL EKPOliT. — PART II. 77 Gold and silver were, for purposes of exchange, one metal ; the varying balance of liquidation between the two countries would have the same eflFect on the exchange as it has in the case of countries having the same currencies ; and its effect would be limited in the same manner, viz., by the cost of transmitting bullion, which in this case was silver, and which always, or almost always, as we have seen, travelled in the same direction, viz., from England to India. If India became more indebted to England upon current transactions, i.e., if she had larger remittances than usual to make to England, the effect would be seen in an alteration of the exchange in favour of England. The rupee would fall and the sovereign would rise. But as the two metals were tied together, this rise or fall would, as in the case of England and the United States, or of England and Australia, be limited by the cost of transporting bidlion. If the Indian exchange had fallen beyond a certain point, it would have paid the Indian merchant better to export silver to England than to pay the premium. As a matter of fact the flow was always from England to India, and therefore the effect of an extreme fall in exchange was to check or stop the flow, not to reverse it. But it was the cost of transport which formed the limit of the fall of exchange. The ounce of silver being always capable of employment at a certain gold value in France, it would always be more advantageous to send silver to France or to keep it there, than to pay an excessive premium on exchange. 65. But when the bimetallic tie was dissolved this state of things was altered. If the current indebtedness of India increased, if there were more remittances to be made by India to England than by England to India, the exchange would alter as before in favour of England, but there would be no such limit as before to the fall in the gold value of the Indian currency. The exchange might alter with the balance of liquidation until an increase in Indian exports, or other alterations in the conditions of trade, had satisfied the liability, and every increase in the balance against India would show itself by a fall in ' the gold value of the rupee. 66. It is not possible to state a complete account between any two countries so as to show, with certainty and accuracy, the balance of liquidation. All that can be done is to o-ive certain known items, and in the case of India these known items are so important, when compared with the, unknown, as to justify some confidence in the result. The following would be the principal items in a complete account : — Liabilities of India. 1 . Imports of merchandise. 2. Imports of gold and silver. 3. Freights on exports, minus expenses incurred in India. 4. Private remittancey of money and securities from India. 5. Balance of remittances on Government account. Means of Payment. 6. Exports of merchandise. 7. Exports of gold and silver. S. Private remittances of money and securities to India. Of these items, those numbered 3, 4, and 8, cannot be procured at all; but they are ijrobably unimportant, as compared with the others, and there is no reason for thinking that they would materially alter the balance. As regards the other items, it is to be remembered that in taking those numbered 12 5 and 6 from the Indian statistics, we include exports to and imports from silver-using countries, as well as to and from England and other gold-using countries. But considering the comparative magnitude of the trade of India with England, and the importance of the item numbered 5 (viz.. Council Bills), these considerations will probably not affect the general results indicated by the figures in the following table. K 3 78 feOYAL COMMISSION (>N GOLD AND SILVER : (= O O o p. a, c3 M d o O o ,. o ^ O ^ o o ^- - „ - -- ^ OS o o o o o o 00 *f :'^ o c> o o o c= p^ p '0^ tl ^1 CO rr' N c? I< Oi OS oT t !» co" -+' oT CO -f o CO CO CO 00 CO -+ 00 '7-1 o eg lO 00 *^ °?, Ol ". j:- '^< .x) P OOl-H iH c? lO co" c? 00 in «" Ol CO rH lO" co" Oi OS CD iH t> (N ca j^ o -."S o g o "T" o CO o § 9 o P o O o o s ^ o o o C5 o o o o '^is to &t r- r-T CO t-' CD o" g §" <* -h" 00 IQ s 1:~ CO CO Oi in O CD CO i:^ CO ■^ CD iH 00 '=^. »=- ^0 m ^ t* in lyj o" s 00 M to" r;i It-" !>■ 1 co" co" 1 if CO Ol CD (M rH O o o ^^ ^ ^ ,™ o c -, g o 1" 5 2 C' «5 o o o o o o p o o o o _og oT CD" co' p s" co' co" 1>" "&i) lO -"I' 00 OO -CI CO o i.O c: CO QO p:, 00 cr- o CO -M 1^ co^ ^ V l^ T^ rj-j 00 « -^ Ui CO w" -« ■m" co" ■^ Tl -* 5^ 69 rH I— 1 oo QD lO t^ rH 1 ■"^ o o ,_ ,_ ^ _ o 2 o - - 1 = Cj ^ c ^, ^, ^_, '5 o o o o . ^ 00 ,.: -^ o o o o o c: p p •J. «ig CC CO o" oT W in" c> in" Cl rH "* t- o CO o i:^ CO iN. CD (M r- CO s ^M H Ol p- J^ '^. in CO w CO CO Ol iH CO" 00 '-^ 1ft CO iri ^" 31 0-: IN •fi '^~- in — ~- 1 in CD" CD -fA "~r" o o o o C5 O O Q o s o o o o o o o o o o o CO o o o o o o o o ■= o o ■^ =1 « SB t^ CO to" OJ OS CO cf o" Os" 00 00 CO 1 ■^-^ o t^ CD o in s in 2 -71 V in CD rsj 1 00 o I-l IO lO in t^ s CO -v_^ p Ol T 1 CO 00 r^^ 1 95 rH ^ o o _ _ o o o o o o o ,- - o P (N o o o •n • o_ o o o o o o o p p c!j p^-^" 1 co' ry. p OS 1 "Gr^ 00 s CO 'Z5 ■^ C3 CO w 1 00 Tf< 00 lb o_ p ■y: cr- *i ""* ^" -^h" ^ lO" oo" s CO ^" 1^ a> c-r OJ co' Os" * o o o o o o o ^ _ (-, o o o => Q ! o o o o o o o o o- OS o CO 5 o oo c= co- g o_ o in" o a7 S CD o 00 CO OS p s 00 oo rn lO ^ in CO ^1 CO CO oo o. o 00 00 ^- ". 00 r-_ CO OS in s s >H s i •**" CD" § w' in 13 " s" " '"' 6B iH f o ^ o o ^ o o (-J o o o O o => 1 ^ in o o o o o o o '=' Phoo t'T § o f-^ o CO in o o § CD CO CO CO cr^ IC 1 5 ■^'i- 00 rH ^ oq i>. r-I o S o =:■ C-. ' 00 t» io o rH CD CO rH J> Jd ->) i^ p CO .t" r-J" CO 1> CO CO lO g -M oo" CO" S ■* X Os" ^' =C rH o c ^ ^ O o ^ o o o o O o o .— .-. o o o o CO o o o o OS ■ o o o o o_ o o

CO co" >o CD o" o cd" -*" o ^r iC ^ I t3'^ r- CO OS CO in in i:* (N CO CO O-^ CM g 1 CO x> CO i> c? M o cd" t- 00 i> cd" oo p j:- £-' I COr-t ^ CD ^ lO ■M OJ o ^ ,_j _ ^ o o Q o g o _, o = 1 CO o o o o O' C5 o 1 . t- V — o^ O^ o o o_ o p o «. CS 1 p ~ CO oi' ■y'J r^ . "o" qJ 00 o 10 00 CO j "S|> I-- 19 CO CO o. -o ■■=■ t^ 00 1 00 Ol CO £» -* '^^ •^ p -^ 00 ^l CO 1-" lo" f CO 1 CO ■o' co" t- 00 «o rH CO s CO (M Ol -/i _ _ ^ _. _ 2 o o o c^ ^ „ o _ e o ■o ■o o p o p 5 ■o^ O' CO p p t- P^S3 o ;o co cT CO vT 00 r-' fC I -I' 'a 00 t^ o or CO in ■b ■^ 1 00 C-l r-< -*- -t- t^ 00^ !>. ^ CO CO CO CO p o" CC &a r^ x- -x> -f ^ o ^ ,-j 2 CO O' .-, O o _ _, ^ ^ 1 :o ^, o o p 1 ^ . '-'' r-1-. Ph -- ^ co" -^ ^-. o 1 t~^ rn' o o ■^ § =. '-„ p ^. 1 Oi ^ -f -r< o '3 1 yi' -t; -^ ^t fyj ■O (N CD ^ S e? ■'/' i:-^ -f lO ' ' tOrH _ . '— . 'P__ -?_ .. . -f _ .__ _.'•'._ f- '_ . _:^ ■O o o —. ^ C- o .— — . O o p ,2, 3, ~ ^ ,4 § o ■§ s ^ § = o 5 O s § % ^. g § >ra t-5 ^" ^ § ^ V. CO rS ^ ri if in J; s? •D 3 g s 1 rn" "^'oi n '' F-H 1' y:^ CO' 3 ^-. 3 3 i> p ^' *^ 1 X o ■~ '"' ■"* 1 '"' ■"■ IQ o _ - o _ _ l_^ ,- 2 o o p ^ „ o o o p 1 in |i ^i o 3 -f rzA' 'S- ^" o co" ,^- o CO 2^ ~- f- r- co" rH ■"-O T^ ^ )0 CO cO l> •^ -M p 00 1 ;S s ct -t Gi CC 1^ p" 00 rH p CO p CO p CD "©rH lO __s _ CO _ _::*'_ rH S '"' -+ g § § ■=■ =■ o g o o P p p o g s ^ i 10 'p ^i o o_ — , ;<, o cr o o p p o s — .V :0 ;^' ^ 3 -fj ■^' 2 (m" £ ■X- o % Cr ;2 s" -g to i CO 1 rH OB rH a^ -f o 'Ti o CD' s s ^" - ! CO P 1 " -^ 1 :o g ~ s ~ g - p m 00 ^1 >^' r-I 5' § o i CO ^ g rS p; 0: 1 1 1 ■«i '^ in ."L^ co" :0 ■"■ s" CO 3 1 p s 1 § OS 15 in 5 00 rH o o oo" ■x' to" 1 s i p. § in 1 1 OJ -0 •VS rH J c o s a g § o = =. 1 g = g § ■5 p 9 ■= 9 OS 4 5 o p i< T- i t -i< ^^ 00 p 1" J^ '2 ? =■ 1 = *' -" , % ■^'0 OO io r-; 'A ^ --c_ c;> y: ■J3 "X 01 •s^ ^-' ^1 '- ' *— ' iH lO ^ t-- -ro -if T-l '3 f' '' - 1 co' 01 oP ^Or-l ■ ■ • S ' S ' ^ ■ , m +3 £ — ' 3 1 f^ c; s t , ' , ' , ' , _ ' 1 ' ■(B m ' ^ a m , 1 !' r , • , ■ , ' . ' , ' ■ "fl ' «■ 1' S g '£. (14 c c 03 3 ' ^ >■ H « , ""^ . > . • . • .1 . o p. p. CD C 1 o 1 2 1 1 a 5 s '^ 3 o c= o o « o 3 k ■■A i cc; is s g a a=5 g ft 1 3 1 7j OJ s 'a CO p. CS M ID 03 bL eg FINAL REPOUT. — ^PART II. 79 (57. These figures show that, so far as we can judge from the items comprised in them, the balance of liquidation has, since 1870, been constantly, though not regularly, against India ; and if the above reasoning is correct, they give a reason why the silver currency of India has become depreciated in terms of English currency, or in other words, why the rupee has fallen in gold value. They thus furnish an additional reason why the demand of India for silver has not been such as to counteract its fall in gold value in Europe ; and why the flow of silver to the East has been checked. It must not be supposed that India stands alone in respect of the change which we have pointed out in the growing balance of liquidation ; but we refer to it here as bearing upon the demand for silver for the purpose of remittance to that country. 68. If our view is correct, it illustrates the real efiect of the Indian Council Bills, which undoubtedly compete with silver as a mode of remittance, and thus have an immediate effect on the silver market. These bills indicate an increased demand for remittances from India to England, and tend to make the demand for such remittances exceed the demand for remittances from England to India. This excess is consequently shown in a fall in the exchange value of the rupee, not now limited as heretofore by the bimetallic tie between gold and silver. 69. It is not to be expected, especially with the imperfect data at our disposal, that the connexion between the fall in exchange, the balance of liquidation, and the different items constituting the balance, can be traced in detail in the statistics. The various items which help to create the balance of international liquidation are too many and too uncertain to make such a process possible. But there is enough in the above figures to show that the balance against India has been and is on the increase, and that the demands on India have not been completely counteracted by increase in her exports. 70. Nor must it be supposed that the increase in the balance of liquidation, as shown in the exchange value of the rupee, indicates any permanent impoverishment of India. It only shows that for the moment the balance of liquidation is against her. Such a result would in fact be produced if the growing wealth of India enabled her to repay the capital of her gold debt with increasing rapidity. The causes which have led to the existence of an adverse balance of liquidation may, indeed, well have been such as to conduce to her essential prosperity, and enable her vo discharge the balance with greater ease. 71. The above are reasons for thinking that the greater part of the fall in the gold Conclusion value of silver has been due to causes affecting silver rather than to causes affecting that the fall gold, and this conclusion fortifies, and is fortified by, the conclusion to which we have '° gjiveTlr already come, that the fall in the gold price of commodities is in the greater part Mainly due due to causes which affect those commodities rather than to causes which affect gold. to causes afEecting 72. Sd far as the fall in prices represents an appreciation of the standard, s"^®'- undoubtedly we are in presence of an evil resulting partly from currency changes, and partly from changes in the quantity of the precious metals produced. It "is of the essence of a good standard that it should be as stable as possible, and should not in itself be subject to causes affecting its relation to commodities. We Parti., § 94. have in the earlier part of the report pointed out the effect of such instability on the relative nositiou of debtor and creditor, and this is specially important in the case of industrial enterprises where the same interest has often to be paid upon borrowed capital even though, owing to the fall in the price of the industrial product, it represents a greatly increased burden. 73. The arguments which have been adduced as to the effect on tiade and enter- prise of falling prices are not without their weight. We do not notice at this point the effects alleged to be directly produced upon prices and industry in this country by the changed relations of silver to gold, although they are by some attributed to the appreciation of the latter metal. There are others who deny or doubt the appreciation of gold, but trace the same effects directly to the altered relation of silver to gold. It will be more convenient, therefore, to defer the discussion of this part of the case until we have dealt with the allegation that the fall in the gold price of silver has directly affected the prices ot commodities produced m or exported to silver- usins? countries. K 4 80 ROYAL COilMISSION UiS GOLD ANti SILVER : Direct effect on gold prices generally of fall in gold price of silver. Report, Part I. Movement of prices in India. Part II., §§ 47-71. Connexion between fall in exchange and in gold prices, illustrated by the fall in the price of yrheat. 74. Before proceeding to do this we must remark that any consequences arising merely from an appreciation of the standard would be but temporary, though not necessarily limited to a short space of time. They would continue, indeed, to operate upon all engagements to pay a fixed sum at a future date, so long as those engage- ments were current. But as soon as all prices had adjusted themselves, as ultimately they must, to the new conditions, the evil would disappear. 75. We pass on to consider the view which has been presented to us that the fall in the gold price of silver has resulted in a corresponding fall in the gold price of comanodities produced in India, and of those which are exported to that country from gold-using countries. A fall in the gold price of silver having taken place, due to the combination of causes pointed out in § 198, it is obvious that a corresponding adjustment in the gold and silver price of commodities was inevitable. It is impossible that there could be, for more than a short period, a greater difference between the silver price of a commodity, used in and exchangeable between silver and gold using countries, and the corresponding gold price, than would be represented by the cost of transferring the commodity from the silver to the gold-using country or vice versa. Whenever, then, a fall takes place in the gold value of silver, either the gold price of these commodities must fall, or the silver price must rise, or the adjustment must be brought about by both these operations combined. 76. If, however, concurrently with the fall in the gold price of silver, there were a fall in the gold price of commodities, then it is possible that, while gold jDrices fell, silver prices would remain stationary, or that a fall would result in both gold and silver prices, and that the adjustment would be arrived at by a commensurate difference in the amount of the fall ; and in the present instance this would seem to have been the case. 77. It is not easy to arrive at an accurate estimate of Indian prices. They have, of course, varied much as regards particular commodities. The price of wheat, for example, has, owing to the failure of crops and other influences, risen greatly at times, and it has, from local causes, varied in different parts of the country. But there seems reason to believe that on the whole the silver prices in India, are at the present iiime, a little, though not gi'eatly, lower than they were. 78. In the case of some important commodities, in the production of which India competes with gold- using countries, the fall in the gold price has exceeded the fall in the gold price of silver ; but the gold price of other commodities produced in India, which are less subject to the competition of other countries, has not fallen to the same extent as that of silver. 79. If the entire fall in the price both of commodities and of silver had I'o.sulted from the appreciation of gold, the problem would be simple enough. In that case both silver and commodities must ultimately fall to the same extent but we have already stated our reasons for thinking that the altered relation of gold to commodities and silver has not arisen alone or chiefly from the appreciation of gold. It follows that in so far as silver prices in India have remained stationary or fallen less than gold prices, other causes affecting the relation of commodities and silver respectively to gold must have been in operation. 80. It is alleged that there is an intimate connexion between the fall in the gold price of silver and the corresponding fall in the price of commodities produced in and exported to India, and that the fall in the gold price of commodities has been brought about directly by the fall in the gold price of silver. More than one witness has stated that such a fall has been followed invariably in experience by a fall in the gold price of wheat, and it has been alleged that the two are connected as cause and effect in the manner we have already indicated in 5 75. 81. The growth of wheat has largely increased in India and elsewhere, and thus competition has become keener. Under these circumstances it is said that the Indian producer whose charges are payable in silver, and who thei-efore receives the same margin of profit so long as the silver price remains the same, can afford, notwith- standing the fall in the gold price of silver, to sell at the former silver price (which of course, means a lower gold price), and will not stand out for a higher silver price. FINAL REPORT. — PART II. 81 82. We think, that when supplies of wheat are increasing and the competition of producers to dispose of it is keen, this tendency will exist, but it is impossible to determine its force and effect with any accuracy. It must be remembered that Eussia, which largely supplies the wheat market, has a currency which is greatly depreciated, and if the fall in the gold price of silver tends to lower the price of wheat, it is not easy to see why the great depreciation of the paper rouble should not have the same tendency. 83. One witness who has had great experience in the wheat trade, and who favours Q. 10,024. the view that a fall in the price of silver tends to depress the price of wheat, has himself pointed out that it is only occasionally that the price of Indian wheat can be said to rule the market. This must depend upon the extent of the supplies from other wheat-producing countries, as compared with those coming from India, as well as upon other circumstances. During the past year, for example, it is said that, owing to an abundant crop, Russian wheat has been the principal factor in determining the market price, and it is manifest that, apart from other circumstances, an unusually good harvest in America might have the same effect. We think, therefore, that it is easy to exaggerate the influence which the fail in the gold price of silver has exerted upon prices, even assuming it to have had any such operation as is suggested. 84. We have already, in §§ 25-31, dwelt upon the reasons which satisfied us that other causes have largely conduced to a fall in the price of wheat, as well as of other commodities. Even then, if the view we are discussing be well-founded, we think it would be a mistake to attribute more than a very limited portion of the fall of price to this cause. 85. Even if it be admitted that it has had some operation, we think it by no means follows that a rise in the gold price of silver would reverse that operation to the same extent. So far as it has acted, it has been a cause working in the same direction as com- petition, and in connexion with it ; and it does not follow that, when acting in the opposite direction and against the force of competition, it would have an equally extensive effect in the other direction. We have used the case of wheat as an illustration, but so far as the same circum- stances exist in relation to other commodities, the effect would be the same. 86. We pass on to consider the prejudicial consequences which are alleged to have Alleged resulted from the fall in the price of Indian produce, especially of wheat, both by bounty on those who attribute this fall to the appreciation of gold, and by those who connect it *^® produc- directly with the fall in the gold price of silver. It is asserted that its effect has been in^indil '^^ to create a bounty upon the production of wheat in India, and thus to act prejudicially owing to' upon other wheat-producing countries. fall in exchange. 87. We do not think the term bounty is in any view properly applicable. If the silver price of wheat in India is no higher than it was, its growth can be no more profitable, and there is, therefore, nothing to stimulate increased production. At the same time, it must be admitted that the Indian producer is for the time in a somewhat more favourable position than his English competitor. The elements which go to make up the cost of production in India being payable in silver, and not having materially increased, the Indian producer, supposing him to obtain the same silver price, is in substantially the same position as before, even although the gold price of silver has greatly fallen. The gold price of his produce has fallen, but so has the cost of production as measured in gold. The English wheat-grower, on the other hand, who receives the corresponding gold price, that is, a lower price than before, is in a worse position, except so far as he can reduce the cost of production in the same ratio as the price of the product. That is to say, unless there is a fall in rent, taxes, wages, and the other elements of which the cost' of production is made up, proportionate to the fall of price, he is at a disadvantage as compared with the Indian producer ; and as it can hardly be contended that this adjustment has as yet completely taken place, there can be no doubt that the English wheat-grower is for the present placed at some disadvantage. 88 In our opinion it is only to a limited extent that prices can. have been affected by, or that the low price of agricultural produce can be due to, the fall in the o-old price of silver or the appreciation of gold. A 56136. ^ 82 KOYAL COMMISSION ON GOLD AND SILVER : Effect of fall in gold price of silver on exports from gold-using countries. As, for example, on cotton goods. The fall in this case can, however, be largely accounted for in other ways. The depressed condition of agriculture is at least largely due to tlie otter cau ses to which, we have, in the earlier part of the report, called attention ; and it must not be forgotten that it is only in one important description of agricultural produce that India competes with this country. 89. We have next to discuss the allegation that the price of commodities produced in this country, and exported to silver-using countries, has been affected by the fall in the gold price of silver. It is said that inasmuch as the Indian producer gets no higher silver price than before, and the ryot is paid the same silver wages, they are not in a position to give more silver than before for the produce which they buy, and, therefore, cannot purchase as much as before, unless the manufacturer is willing to sell at the same silver price, that is to say a lower gold price ; and the result of this must be either a diminished sale of these imported goods, or the supply of an inferior article, or the sale of the same article at a lower gold price. Very serious complaints have been made of the consequences which are said to have ensued, especially to the trade and manufactures of Lancashire. 90. We do not deny that fluctuations in the rate of exchange do constitute to a certain extent an impediment to trade ; nevertheless it appears that the trade between this country and India has increased largely in volume. But it is said that as the gold price of silver has continued to fall, so the price of Lancashire goods exported to India and China has fallen in correspondence with it. Inasmuch as it appears to be the fact, whatever be the true explanation of it, that the Indian producer receives, notwithstanding the fall in the gold price of silver, no more silver for his produce than before, and the wage-earner no higher wages, we think that these circumstances, other things remaining the same, would have a tendency to reduce either the quality or the price of the goods exported to silver-using countries, or perhaps both. The increased volume of trade may be accounted for by an increase in the number of wage earners and the purchasing power of the country, consequent upon its increased prosperity, and the growth in its own export trade. The opening up of the country by means of railways, and the development of agricultural industry would no doubt enable a larger number of persons to purchase the imported commodities. 91. But we think it would be wrong to attribute the whole or anything like the whole fail in the price of Lancashire goods to such a cause as that above described, even if it has had any substantial operation. Many other factors have been at work. The cost of the raw material has diminished, and so has the expense of conveying the goods to their destination, and considerable economy has been effected, by improved machinery, in the cost of production. A given number of workers can now turn out a greater product. All these changes have conduced to enable the manufacturer, without any alteration of his position, to sell to the Indian purchaser at a considerable reduction in price. 92. In addition to this, those who have most loudly complained of the disastrous effect upon Lancashire industries of the fall in the gold price of silver, themselves attribute the unfavourable position of these industries in part to other causes, and notably to the enormous development of competition due to the large increase in the number of mills, which they allege has arisen from the working of the Limited Liability Acts. 93. Even if it be admitted that the depression of prices may possibly have been intensified by the changed relation of silver to gold, we think that it is mainly attributable to other causes ; and it must be remembered that if the conclusion we have expressed as regards the depreciation of silver be well founded, the fall in the silver price of important Indian products would, but for the fall in the gold price of silver, have been considerably greater than it has been ; and if so, the producer has, by reason of that fall, received more silver for his produce than he otherwise would, and has, therefore, been able to give more silver for impoi'ted goods than if no such fall had taken place. 94. We have already pointed out that even upon the hypothesis we have been discussing in the preceding §§, it must not be assumed that a rise in the gold price of silver would be followed by an equal rise in the gold price of Indian commodities ; and if it were not, the Indian producers would receive less silver for the same amount FINAL REPORT. — PART II. 83 of produce, and it would not therefore necessarily follow that they would be able to pay a higher gold price for the goods they purchased. 95. So far as the fall in prices can be connected with the currency, it cannot be Evils attend- denied that it is attended with great inconveniences. '^S ^ ^?^^ °^ It must tend to diminish the margin of profit, or even to cause it to disappear ^JaUerL*^"^ altogether, and this necessarily results in an efibrt on the part of the manufacturer tions in the to economise the cost of production by reducing the wages of the operatives. standard of Even if the manufacturers could succeed in . reducing wages sufiiciently to maintain ^*^"®- their former _ position, this could only be done after considerable struggles and an amount of friction very undesirable. It is true that real wages depend not on their nominal amount but on their purchasing power, and that the wage-earning class may be in the same position as before, although they receive lower nominal wages. But this is not immediately obvious, and does not prevent the disturbance of trade and the ill-feeling which result from an effort to reduce wages. Further, it seems by no means clear that there has been a fall in the price of all that the wage-earner needs, and upon which his wages are expended, equivalent even to the reduction of wages which has, in fact, taken place. 96. Here again, however, we must beware of exaggeration. There is always a temptation to refer all the phenomena which are observed to a single cause ; but, both lower wages and want of employment, which depend on the state of the labour market, must have been affected by other causes besides the special one we are considering. All labour-saving inventions and the displacement of labour from other branches of industry, such as agriculture, must have tended, for a time and until a complete adjustment has taken place, to lower the rate of wages. 97. It is not only in the manner which we have been discussing that the trade of Complaints Lancashire is said to have been afiected. Complaints are also made, as we have seen, of increasing that a part of that trade has been lost owing to the competition of cotton mills in of 'in^an"" India, and especially at Bombay, which, it is alleged, have been unduly fostered by the cotton in- advantage afforded them through the lower gold price of silver. dustry. "We need not repeat the facts relied on, which are to be found in § 76 of our main report, where we have pointed out that the question is of a very technical character, Report, and is stiU under consideration by experts. Under these circumstances we are not Part I. prepared to pronounce any judgment upon it. 98. In concluding the expression of our views upon this part of the case, we would Impossibility observe that the character and mode of operation of the influence which the currency °^ forming exerts upon prices are matters of extreme complexity, and have been the subject of concfusTonT extended discussion. _ as to the Extremely different views have been maintained and adhered to with equal tenacity relation bv able and painstaking economists. Treatises of considerable length have been between written expounding these dinerent views. and prices. We feel that it is quite impossible, without extending this report to an unreasonable and inconvenient length, to exhaust the discussion of the subject. All that we can do is to indicate the conclusions at which we have arrived, alluding briefly to the arguments which have been most prominently put forward. We are strongly impressed with the conviction that the materials do not exist, and that the time has not arrived for the expression of a confident opinion upon these points. We offer our conclusions as at best but an approximation to the truth, and not as loo-ical deductions resting upon the assured basis of ascertained facts. 99. We may summarise our conclusions upon this part of the case as follows : — We Conclusions xnink that the fall in the price of commodities may be in part due to an appreciation as ^ fall of of gold but to what extent this has affected prices we think it impossible to determine, Commodities. with any approach to accuracy . . .-, ^ ■, -, . -, We think, too, that the fall in the gold price of silver has had a tendency operating in the same' direction upon prices ; but whether this has been effective to any, and if so to what extent, we think equally incapable of determination. We believe the fall to be mainly due, at all events, to circumstances independent of changes in the production of, or demand for, the precious metals, or the altered relation of silver to gold. ^-u- i ^x, ^ ^i i v i i As regards the fall m the gold price of silver, we think that, though it may be due in part to the appreciation of gold, it is mainly due to the depreciation of silver. 84 ROYAL COMMISSION . ON GOLD AND Sll-VER : Effect upon India of fall in gold price of silver. Keport, Part I., §§ 103-113. Part II., §§ 14-16. 100. We have hitherto been dealing with the effects which currency changes are alleged to have produced upon the commerce of this country and of India generally. We now turn to certain special evils which are said to affect the financial position of the Indian Grovernment. Here we are on firmer ground. It is not necessary to make any detailed statement of the considerations bearing upon this part of the case, as they are fully set forth in § 103 and the following §§ of our main report. We have already made some allusion to them in the discussion of the results which have flowed from the fluctuating relation between gold and silver. 101. There cannot be two opinions as to the very serious effect which the continued fall in the gold price of silver has had on the finances of the Government of India. Unless expenditure be diminished every additional fall in the value of the rupee renders additional taxation necessary if a deficit is to be avoided ; and even if it be true that India has upon the whole benefited by the fall in the gold price of silver, that the condition of her agricultural industry has improved, and that commercial enterprises have prospered, this does not obviate the difficulties of the Grovernment. Even if, in consequence, additional taxation might in some quarters be weU borne, it is not easy, if indeed it be possible, to devise means by which such additional taxation should impose a burden only on those who are able to bear it. 102. We are fully impressed with a sense of the difficulties which surround the Indian Government, and of the serious questions to which any proposed additional tax must give rise. It is not only the embarrassment which has already been caused to the Government of India that has to be borne in mind, but the impossibility of foreseeing to what extent those embarrassments may be increased, and their difficulty augmented, by a further depression in the value of silver. We have no hesitation, then, in expressing the conclusion that the changes in the relative value of the precious metals are causing important evils and inconvenience to the Government of India, which are well worth the endeavour to remedy them, if a remedy can be devised, which could be adopted without injustice to other interests and without causing other evils or inconveniences equally great. It must be remembered, however, that if the view be correct that there has been a substantial fall in the value of silver which has prevented the silver prices of Indian produce being as low as they otherwise would have been, then to that extent the Indian taxpayer has escaped the increase of his burdens which would have resulted assuming the taxes imposed to have remained the same. Conclusions as to the Remedies which have been suggested. 103. We turn now from the consideration of the evils attributed to the altered relation of gold and silver and to currency changes, to inquire whether any remedv can be found which would remove these evils, without bringing with it others as ffreat or greater, in their place. ' ' Bimetallism. No measure nas been suggested that claims to be anything like so complete and thorough a remedy as the adoption of the system known as bimetallism. Objection has been taken to the use of this term on the ground that it does not accurately describe the nature of the system. It is unnecessary to discuss the iustice of this criticism, as the term has been so generally employed to describe the arrange- ment which prevailed in the Latin Union prior to 1873, that it would onlv cause confusion if we were to adopt any other expression. Concurrence of other Powers essential. 104. We, have described in § 116 of Parti., what a bimetallic system of currency. Before proceeding to discuss the merits observe that we shall do so on the basis are the essential elements of and demerits of such a system, we would that this country would not be prepared to entertain the question of its adoption at all, unless as part of an international arrane- - ment to which the leading commercial nations of the world were parties. No one has seriously proposed that England should, except as a party to such arrangement, abandon her present gold standard, and substitute a bimetallic one and although some have maintained the position that if the Latin Union alone were t revert to their former practice, it would be effectual to achieve the object in view th^ advocates of bimetallism are generally agreed, that the true basis to be sought is such an international arrangement as we have indicated, FINAL REPORT. — PART II. 85 We should, however, point out that they are not agreed as to the inclusion of Position India in any such arrangement. Its exclusion would be a singular anomaly. Its of India, inclusion would provoke fresh and grave difficulties. Nor have we any means of ascertaining what view would be taken by Australia and and of other of our Colonies with reference to the formation of a bi-metallic union. As Australasian large producers of _ gold they might naturally take objection to it, and it would bo a «°'°°'®«- serious matter to introduce a different system of coinage in the mother country and our larger colonies. 105. We would further observe that if the question is to be entertained at all, it Ratio to be appears to us that it should only be on the basis of a ratio, between silver and °?*^ery gold, approximating to the present market ratio of the two metals. from market It would not of course be practicable for obvious reasons to adopt, as the basis of ratio of the the arrangement, what happened to be the market ratio at the date fixed for its day. coming into operation. It would probably be thought desirable to take the average ratio of two or three years. We will state hereafter our reasons for thinking that it would be highly inexpedient to adopt a ratio differing very materially from that ruling in the market, and that to revert to the ratio of 15^ to 1 formerly in force in the Latin Union would be fraught with serious danger, not to speak of injustice. We shall for the present pursue the inquiry upon the assumption that an inter- national agreement could be arrived at, under which the United Kingdom, Grermany, the United States, and the Latin Union should be parties to the adoption of a bimetallic system with a ratio approximating to the market ratio. 106. The first question that arises is, how far would such a scheme remove the How far evils to which we have drawn attention ? such a The proved evils we take to be the following: : — The inconvenience and burden to scheme could which the commerce between gold and silver using countries is subject, owing to f^j. ^he fluctuations in the relative value of these metals ; and, further, the difficulties in alleged evils. which the Indian Government is involved, owing, not only to the fluctuations in the relative value of the metals forming the standard in this country and in the Indian Empire respectively, but also to the fall which has taken place in the gold price of silver, as well as the uncertainty and apprehension due to the impossibility of fore- casting the future position of that metal, and the extent to which its gold price may yet fall. There are other evils complained of — such as the fall of prices attributed to the appreciation of gold, the alleged tendency in the fall of the gold price of silver to depress the prices of commodities produced in and exchangeable between gold and sdver using countries, and the further tendency attributed to this fall, to favour unduly the competition of India, as against this country, alike in its internal commerce and in that with silver-using countries. These are, no doubt, worthy of grave con- sideration, as possibly arising from alterations of the currency, and of the relation of the precious metals to one another, but we do not consider them as by any means proved. 107. The first step towards answering the inquiry we have proposed to ourselves is Possibility of to determine the subsidiary question whether a bimetallic arrangement could create maintaining and maintain a stable ratio between silver and gold. J^^itJ of the We have already so fully set out the opposing views held on this point, that it will be sufficient, without examining them at any length, to state the conclusions at which we have ourselves arrived. We think that in any conditions fairly to be contemplated in the future, so far as we can forecast them from the experience of the past, a stable ratio might be maintained if the nations we have alluded to were to accept and strictly adhere to bimetallism, at the suggested ratio. We think that if in all these countries gold and silver could be freely coined, and thus become exchangeable against commodities at the fixed ratio, the market value of silver as measured by gold would conform to that; ratio, and not vary to any material extent. We need not enter upon a detailed explanation of our reasons for entertaining this view, since they will be gathered from what we have already stated when discussing the causes of the divergence in the relative value of the two metals, and will be seen to result, in our judgment, as well from a priori reasoning as from the experience of the last half centuiy. L a 86 ROYAL COMMISSION ON GOLD AND SILVEE : 108. We do not deny that it is conceivable that these anticipations might b6 falsified by some altogether imprecedented discovery of one or other of the precious metals, and that the maintenance of a stable ratio might then become difficult. But for practical purposes, we think we may put this aside and reasonably act on the assumption that no such grave dislocating cause is likely to arise. "We have already drawn attention to the fact that, during the time covered by the great gold discoveries, the production of silver continued undiminished, and that of late years, when gold is said to have been appreciating, the production of silver has increased. Fluctuations of exchange due to diiference of standard would be prevented. 109. We pass on then, to the next point, namely, assuming such a stable ratio to be secured, what effect would it have upon the evils with which we have to deal ? Fluctuations of exchange between countries having a different standard, so far as they depend upon the varying relation of silver to gold, would cease, and the perplexities and difficulties which now so severely beset the Indian Grovernment would be at an end, subject to this qualification, that so far as the burden on the Indian Exchequer is due to the fall which has taken place in the gold price of silver, that burden would continue permanently. But it must be remembered that in the view of the Indian Grovernment — and upon this point we agree with them — this would involve less danger and evil, than the contintiance of the present state of uncertainty with the risk of a future fall. Effect upon other evils. Enlargement of basis of credit. Would not remedy the fall which has already taken place. 110. As regards the other evils which we have classed as possibly or probably due to monetary changes, rather than as conclusively proved to result from them, the adoption of bimetallism would not be without its efffect. In so far as the fall in prices which has occurred is due to the appreciation of gold, we think its adoption would tend to check and diminish, if not to prevent, further depression of prices from appreciation of the standard. If in any degree the fall in the price of commodities produced in and exchangeable between gold and silver using countries respectively has resulted from the faU in the gold price of silver, this cause would cease to operate, and no further depressing influence could ensue from it when once a stable ratio between the two metals was established. Finally, if it be true that a fall in the gold price of silver unduly favours Indian manufacturers in their competition for trade at home and with silver-using countries, there would be no extension of this fostering influence.' 111. We may point also to an advantage of a different character which might perhaps arise from the adoption of bimetallism. There seems reason to believe that the production of gold has been diminishing, and it is uncertain whether this diminution has reached its lowest point. On the other hand, there is some reason to suppose that the use of that metal in the arts is likely in the future to increase. There can be no doubt too that the popula- tion and commerce of nations having a gold standard may be expected to increase largely. Under these circumstances it may be open to argument that the vast superstructure of credit, which rests upon a gold basis, would run the risk of being disturbed if the standard were found to be appreciating. If, on the other hand, credit were founded on a bimetallic, instead of a gold standard, the base upon which the fabric rests might be enlarged, and the danger to which we have alluded might be diminished. 112. _We have yet to consider whether the adoption of the bimetallic system, even if it did effect a cure of all or some of the evils, at present experienced, would be itself productive of mischief as great or greater. We have already pointed out that so far as the finances of India have suffered from the fall in the gold price of silver, the burden due to this cause would then become permanent. It is also obvious that if, and in so far as, the gold price of commodities has fallen owing directly to the fall iu the gold price of silver, that fall would, other things remaining the same, be permanent also, and the chance of some rise in these o-old prices, due to a rise in the gold price of silver, would be lost. ^ But if, on other grounds, the .adoption of bimetalhsm were deemed expedient, we should not regard this as a fatal objection, or as counterbalancing the advantages to be obtained from it. FINAL REPORT. — PART II. 87 113. There are other reasons against its adoption, deserving of far more serious FiDancial consideration. position of It is alleged that the position of England as the financial centre of the world kingdom depends greatly upon the fact that she has, and has for a long time enjoyed, a gold might be standard. affected. This is no doubt strenuously controverted, and it is asserted by other authorities that the financial position of England is in no way bound up with the circumstance that she is monometallic, and that her standard is a gold one. "We need hardly dwell upon the fact that the financial position which this country occupies is a matter of immense importance, that the risk even of interfering with it, or of taking any course which could reasonably be expected to affect it, is not to be lightly encountered ; and even those who do not entertain grave apprehensions of a disturbance of existing financial conditions, if we were to depart from monometallism and accept the bimetallic standard, cannot dispute the fact that the existence of such apprehensions is not to be treated as a trivial circumstance, or one to be lightly regarded. The danger may be enhanced by the circumstance that the mere fact of one change having been made would lead to the apprehension that others might follow. 114. It has not been suggested by the advocates of bitnetallism that we ought, if Possibility of that system were adopted, to prohibit contracts requiring performance by the payment contracts specifically of one or other of the precious metals ; and in the present state of financial ^^ „"„ j^^ opinion and practice it seems by no means certain that such contracts, if permitted, one or other would not be common. of the two The result of this might be not only to cause some strain upon the bimetallic ratio, ™^**1^ ""^ y- but to send gold to a premium, and to produce considerable financial disturbance. 115. A further danger to be apprehended is that the nations who were parties to Dangers the bimetallic arrangement might not continue to adhere to it. arising from It may be difficult to suggest any motives which should make it their interest . to ggcession of secede ; and it may be capable of proof that any country violating the international some of the compact would subject itself and its people to loss and serious inconvenience, but, contracting unhappily, enlightened self-interest is not the only motive of the political action of I'o'^ers ; nations, nor is self-interest always enlightened. A desire to inflict injury may often exercise as potent an influence as self-interest, and the idea that the financial position of one country might be endangered with a resulting advantage to other countries might well afford a suflBcient motive for action. Any such departure from an international compact might indeed set this country free again to act as she chose, but if the result were to compel her to revert to the system she had abandoned, she would undoubtedly find herself in a position worse and fraught with greater evils than if she had maintained her existing standard. At present the action of this country is unfettered, and not dependent upon the course taken by any other Power. This condition of freedom would cease as soon as she became a party to an international agreement. Dangers arising from this cause would be aggravated if it were found necessary, as we think it would be, to embody in an international agreement detailed stipulations with regard to the coinage, currency, or internal financial arrangements of the several countries joining in it. 116. Another serious consideration is that the governments as well as the banks or from a and financial institutions of particular countries might, notwithstanding the existence tendency to of a bimetallic system, seek to accumulate gold. It may truly be described as at ^°^^ ^° ' present the more esteemed metal of the two. There has certainly been a tendency of late years to substitute it for silver as the standard, and to use it to an increased extent for currency purposes throughout the commercial world. With the single exception of the Bland Act in the United States, all recent changes in currency legislation have been in the direction of using gold rather than silver for currency purposes. This fact shows at any rate a sentiment in favour of gold which may not be without its influence ; and indeed beyond the mere sentiment, the superior con- venience of that metal for monetary purposes may tell in the same direction. 117, In addition to this, the apprehension that the bimetallic arrangement could not be relied on as permanent, and the fear of secession from it, might operate strongly to induce bankers and financiers to hold as large a stock as possible of gold rather than silver. This might cause a struggle for the possession of gold with L 4 88 KOYAL COMMISSION ON GOLD AND SILVER Eeport, Part I. Improba- bility of gold dis- appearing from circu- lation. G-eneral conclusion as to bi- metallism. consequent financial disturbance, and with the result that nations^ who are accustomed to the use of gold for the actual purposes of currency, and who have enjoyed its superior advantages for that purpose, owing to its bulk being less in proportion to its value, might not be able easily to acquire or retain all that its people needed for these purposes. 118. In this connexion, the experience of France is, we think, very instructive. The table given in § 124 of the main report shows the coinage in that country from 1816 to 1880. It will be observed that from 1830 to 1845 the coinage of gold was almost replaced by that of silver, and from 1846 to 1865 that of silver again, to a great extent,_ by that of gold. The continuance for a few years longer of the conditions which prevailed up to 1845 would apparently have resulted practically in the entire cessation of gold coinage in France. Even as things were, the result led to the existence of an agioon gold coins ; and it seems probable that the most extended international agreement would lead from time to time, in some of the countries included in it, to the existence of a premium on either the gold or the silver coins ; and it cannot be denied that an agio on any part of the coinage would, be a serious evil. 119. Apprehensions have been expressed that if a bimetallic system were adopted gold would gradually disappear from circulation. If, however, the arrangement included all the principal commercial nations, we do not think there would be any serious danger of such a result. Such a danger, if it existed at all,, must be remote. It is said, indeed, by some that if it were to happen, and all nations were to be driven to a system of silver mono- metallism, the result might be regarded without dissatisfaction. We are not prepared to go this length, but, at the same time, we are fully sensible of the benefits which would accrue from the adoption of a common monetary standard by all the commercial nations of the world, and we are quite alive to the advantage of the adoption by these nations of. an uniform bimetallic standard as a step in that direction. 120. We have thus pointed out the advantages and disadvantages to be anticipated as the result of entering into the bimetallic compact suggested. We have now to weigh the advantages against the disadvantages, and to answer the question whether in our opinion the result of the change would, upon the whole, *prove beneficial. It is comparatively easy to estimate with substantial accuracy the extent and force of evils or inconveniences of which we have 'had experience. To weigh with just and accurate balance the possible dangers and evils that might result from a change is a very different matter. They must be largely the subject of conjecture. The opinions of economists and men of experience in financial matters with respect to them have diff"ered, and are likely to differ. Even if not prepared to rate them as high as some have done, we cannot question their reality. The change proposed is tremendous, and we cannot but feel that to a great extent it would be a leap in the dark. The public mind certainly is not prepared for it at present, and the very novelty of the proposal would excite apprehensions, which, in themselves, might not be without their danger. We speak of the novelty of the proposal, because, though it has been for some years publicly advocated with great ability and earnestness, it has not found anything like general acceptance, and those accustomed to the existing system have often been disposed to put it aside as a chimerical proposal, unworthy of serious consideration. Under all these circumstances, whilst fully impressed with the difficulties of the present situation, and more especially with those which affect the Grovernment of India we are not prepared to recommend that this country should proceed to negotiate with other nations a treaty embodying a bimetallic arrangement. We feel that the matter needs' much more discussion and consideration in the financial world, and by practical men, than it has yet received, and that we are not in a position to advise with any confidence that the change could be made safely, or without the risk of creating evils exceeding those which we at present experience. 121. We have hitherto discussed the subject on the assumption of a bimetallic ratio approximating to the present market value of the metals. FINAL REPORT, — PART II. 89 We have now to state our objections to the proposal that this country should Objections agree to a bimetallic arrangement with the old ratio of 151 to 1, which differs so to reverting widely from the present market ratio. *° I5i to^° It is said indeed by some of the advocates of bimetallism that this is the only ratio at which an international agreement could be secured. We do not thmk it falls within the scope of the reference to us to express any opinion upon the point ; nor have we the materials for forming one. But though we appreciate the difficulties there might be in inducing some nations to concur in any other ratio, it does not appear to us clear that when all the circumstances were considered, and future possibiUties taken into account, they would necessarily reject a bimetallic ratio much more nearly approximating the present market ratio, if there were no hope of securing the result they desired. 122. Reverting to our objections to the ratio of 15| to 1, we would observe that Difficulty of doubts may be entertained whether it would be possible to restore and maintain maintaining permanently a ratio so much at divergence with that which at present exists in the ^jgerenr market. _ from the Even if it be admitted, that supposing the Latin Union had continued acting as they existing did. before 1873, silver would never have fallen to its present gold price, it does not market necessarily follow that the divergence having arisen, and men's minds having been ^^ '°' affected by it, a recurrence to the free coinage of silver, even within a more extended area, would necessarily restore the former conditions. We do not, however, dwell upon this point, and will assume for the sake of argument that a stable ratio of 15^ to 1 could be maintained. 123. We will treat of the effect of a bimetallic system at such a ratio, first, upon the interests of this country, and next of India. If the effect of the currency changes made by other nations within the last Effect of a 20 years, coupled with the changes in the production of the precious metals, have ratio of l Si- produced an appreciation of gold resulting in a fall of prices, the result of adopting j^^j^"^ bimetallism at the suggested ratio would be to cause a rise in the price of these commodities, and thus, by an act of the State, to alter the relation of debtor and creditor, and of those who have entered into commercial contracts. This rise might be sharp and serious, and lead, as such rises not unfrequently do, to serious commercial confusion and disaster. It might also diminish the purchasing power of wages without, for a time at any rate, increasing their nominal amount. 124. Such a measure would be manifestly unjust. It may be said that it would Injustice of only be reversing the process which has been going on ; but those whose position has a measure been altered by the fall of prices are not the same persons as those whose position ^j.^^g^J^f ^g, would be affected by the rise ; and it is one thing to have to submit to conditions of prices, which are the result of causes entirely outside the action of the State, and another to be called upon to endure loss resulting from its interposition. 125. We do not dispute that all monetary relations and liabilities are entered into and incurred subject to such alterations of the currency of the country as the public advantage may demand, and that to any inconvenience, resulting from a change dictated by those motives, the subjects of every country must be liable. But so far as this change is advocated, as it is by many, on the very ground that it is calculated to raise prices, we should object strongly to State interference with the currency with any such object, and should think such artificial raising of prices an evil, even if the change were made for other reasons. If currency changes need to be made for the public weal, inasmuch as they must involve inconvenience or loss to some, it appears to us that justice requires that the change should in nowise transcend the necessities of the case, and that the loss or inconvenience should be rendered as small as possible. 126. Even those who are not disposed to attribute the fall in the price of com- modities which has marked recent years entirely, or to any great degree, to monetary changes must admit that such an alteration as that proposed would be likely for a time, if not permanently, to cause a serious disturbance of prices. The very fact that 'many people anticipate a great rise of prices from such a change would of itself tend, for a time, to bring about that result. 127- Another consideration which we think deserving of very great weight is this. Dangers If such a ratio were adopted, all the dangers to which we have drawn attention, already as possibly connected with the adoptioii of a bimetallic system, even at the existing ^^^^jj'^^g*^'' M A 56136. ""■ rise 90 ROYAL COMMISSION ON GOLD AND SILVER intensified by a ratio of 15i to 1. EiFect upon England as a creditor country, and upon the position of the Government of India. market ratio, would be mucli increased. The risk of a struggle for gold, of endeavours to accumulate tliat metal, of a temptation to break away from the agreement, and of the other causes of financial disturbance upon which we have dwelt, would be greatly intensified. 128. It must be remembered too that this country is largely a creditor country of debts payable in gold, and any change which entailed a rise in the price of commodities generally, that is to say, a diminution of the purchasing power of gold, would be to our disadvantage. and upon 129. The interests of our Australian and other gold-producing Colonies, at which the Colonies, -^g have already glanced, must also be considered. Their deposits of gold are one of their principal sources of wealth, and any measure which tended to check gold-mining or to depreciate that metal would, in all probability, injuriously affect the prosperity of the Colonies, and re-act upon the trade of the mother countiy with them. 130. Turning next for a moment to the special dangers to India, which might result from adopting this ratio, we would remark that although the G-overnment of India would undoubt-edly be a gainer, in so far as the burden of its gold debt would be diminished, yet there would be at least a serious risk of substantial mischief to the people of India. If there be any truth in the theory that the fall in the gold price of silver has depressed gold prices, the silver price remaining stationary, we have pointed out our reasons for believing that it by no means follows that a rise iu the gold price of silver would create an equal rise in the gold price of commodities. And if the gold price of commodities produced in India did not rise to the same extent as the price of silver, the Indian producer would receive a lower silver price for his com- modities, while he would remain liable to the same taxes and charges as before. This would be the case also, if the view we have indicated be correct that the fall in the gold price of silver is due mainly to the depreciation of silver. Any change having the effect of lowering silver prices, while taxes and charges remained unaltered, might occasion serious discontent, and if it were seen to be a consequence of political action, it might create political dangers as grave as any that are likely to result from a continuance of the present conditions. Further, if it be true that cotton manufactures in India have been fostered and stimulated by the fall in silver, it would be a serious matter, and certainly likely to engender great discontent, if by an act of the State, the manufacturing industry thus created were seriously hampered if not destroyed. 131. We have already intimated our doubts whether the advantages to Indian producers, or the disadvantages to English producers, alleged to arise from recent currency changes have been proved ; and our still greater doubts whether, if they do exist, they would be removed by taking measures to return to the status quo. But on the assumption that they would be so removed, we desire to express our opinion that, so far as the measure in question has this object in view, it would be questionable, in point of justice and policy, for this country to take from India by legislation any benefits the latter may have derived from changes in the value of precious metals which are in iiowise due to such legislation. 132. Although we have not felt ourselves able to recommend that this country should enter into negotiations with the view of establishing a bimetallic system of currency, we have indicated that we are fully sensible of the considerations which have been urged by the Government of India ; and we think that every proiDosal which seems calculated to diminish these difficulties, and to ease the existing situation, is deserving of very careful consideration, and that an earnest endeavour should be made to adopt any which should appear to promise substantial advantage without the risk of greater evils. Difficulties of the Government of India deserving of serious considera- tion. Remedies other than ?jimetallism. 133. "We have already given our reasons for thinking that some of the proposals presented to us, such as those discussed in §§ 167 and 168 of Part I-, are impracticable, and it is not necessary to dwell further upon them. The proposition to establish a gold standard in India is deserving of more serious consideration, but it cannot be disputed that there are formidable dilficulties in the way of its adoption. We think, however, that in the consideration of this, or any other proposal of Indian legislation, for removing the difficulties of that G-overnment, the interests of India should alone be considered. While we cannot recommend that the mother country FINAL EEPOET. — PAEX II. 91 should run any serious risk in altering its system of currency in order to assiet tne dependency, we think that the Government of the latter should be allowed a free hand to deal with the problem as it considers best in its own interest. 134. Before passing on to other proposals there is one which we recommend for f^^^^l^. adoption without hesitation. Ig^^g ^j,,^ We refer to the abolition of the duty on silver plate, to which we have drawn attention Eeport, in §173. "We do not suggest that it is likely to have any very extensive result, but, so Part I. far as it operated, it would be beneficial, and a step in the right direction. 135. We pass now to other proposals of a practical character. In ox\T opinion it might be worth while to meet the great commercial nations on Negotiations any proposal which would lead to a more extendedSiuse of silver, and so tend to prevent ^^i* °^^^^ the apprehended further fall in the value of that metal, and to keep its relation to ffold <=°'f"t"es I T_T ' r fc) with a view more Stable. to a larger buch negotiations would probably be in the direction of an agreement that each coinage of nation should annually coin a certain amount of silver. It would not be essential to silver. such a scheme that the amount fixed should be the same in every country, but the question might, no doubt, be raised in the negotiations for such an agreement that, in those countries where silver is not now legal tender to an unlimited amo^unt, it should be made so to a greater extent than at present. Any such proposal would have to be considered in relation to the extent of the suggested increase and the amount of silver agreed to be coined. 136. The real difficulty of the present situation lies in the position of the Govern- ment of India on the one hand, and of the foreign nations whose currency consists in a large part of silver on the other. The nations forming the Latin Union are large holders of silver, and are greatly interested in maintaining its value. It is possible, moreover, that India, in order to obviate the difficulties from which she at present sufibrs, may determine, as she has already proposed, to follow the example of the Latin Union and close her mints, a measure which would still further depreciate the value of silver. If this course were adopted the States of the Latin Union, as large holders of that metal, might be seriously affected ; and it is worthy of consideration whether foreign Governments might not be approached with a view to ascertain whether they would open their mints to a greater extent than at present to the coinage of silver, for a given term of years, on an undertaking from India that she would not close her mints during the same period. In order to assist such an arrangement we think that part of the bullion in the Issue Department of the Bank of England might.be held in silver, as permitted by the Bank Act of 1844. We are aware that a similar suggestion made in 1881 was not accepted, but the possibility that India may follow the example of the Latin Union in closing her mints may render the countries forming that combination more disposed to entertain the proposal. 137. We think that the best suggestion in relief of the tension of the existing issue of situation is to be found in the issue of small notes based on silver. These might small notes become the substitutes for the half-sovereign, and if they came into, general use, ba,sed on they would afford a remedy for those difficulties in relation to that coin to which public attention has been prominently called. Twenty-shilling silver notes might also be issued. If these were put into circulation they would probably pass largely into use, without any alteration of the law of legal tender ; and we are inclined to think the Mint or Bank might safely be required to issue such notes to some fixed amount, in exchange for silver bullion taken at the average market price ; or the Government might issue them upon condition of retaining silver capable of being coined into an equal _ number of shillings. The market thus opened for silver might check the decline in price of the metal, besides producing an economy in the use of gold. We are quite aware of the objection which has been taken to the issue of small notes on the ground of the great expense which would be incurred, if the system at present adopted by the Bank of England with reference to its existing bank notes were applied to these smaller issues, and of the danger of forgery if this system were not applied ; but when we consider the enormous note circulation for small amounts current in the United States, we cannot but think that these apprehensions a.re excessive, and that Experience the difficulties in the way of issuing such notes cannot be insuperable. The facts with of the United regard to the issue of silver certificates in that country to which we have called thL* respect M 2 1)2 KOYAL COMMISSION ON GOLD AND SIL\EE : attention in § 126 of Part I. of the Report, throw an important light upon the feasibility of the proposal we have been discussing. 138. Though unable to recommend the adoption of what is commonly known as bimetallism we desire it to be understood that we are quite alive to the imperfections of standards of value, which not only fluctuate, but fluctuate independently of each other ; and we do not shut our eyes to . the possibility of future arrangements between nations which may reduce these fluctuations. One uniform standard of value for all commercial countries would no doubt, like uniformity of coinage or of standards of weight and measure, be a great advantage. But we think that any premature and doubtful step might, in addition to its other dangers and inconveniences, prejudice and retard progress to this end. We think also that many of the evils and dangers which arise from the present condition of the currencies of different nations have been exaggerated, and that some of the expectations of benefit to be derived from the changes which have been proposed would, if such changes were adopted, be doomed to disappointment. Under these circumstances we have felt that the wiser course is to abstain from recommending any fundamental change in a system of currency under which the commerce of G-reat Britain has attained its present development. All which we humbly submit for Your Majesty's gracious consideration. (Signed) HEKSCHELL. C. W. FREMANTLE. JOHN LUBBOCK. T. H. FARRER. J. W. BIRCH. LEONARD H. COURTNEY. Geo. H. Murray, Secretary. October 1888. In signing this Report we must take exception to § 137. No evidence was taken by the Commission with reference to a small note issue, and numerous questions and doubts occur to us as to the soundness of such a scheme. As the Report simply makes the suggestion without entering into details, we do not consider it expedient that two members of the Commission should set out the grounds of their dissent. We therefore confine ourselves to the simple statement that we do not agree with our colleagues on the above point. With reference to § 135 we think that, if any change is introduced in the amount for which the silver coinage is made legal tender, the State should undertake to exchange it for gold, if required. We feel also grave doubt as to § 107 of the foregoing Report. In Prance, as stated in § 124 of the main Report, the coinage of gold almost entirely ceased in 1841-45 and that of silver in 1861-65. The powerful combination known as the Latin Union', and comprising France, Italy, Belgium, and Switzerland, have not considered it possible to keep their mints open to the coinage of silver, and the ratio has fallen from 15-| to 1 to 22 to 1. We must, moreover, consider the very large uso of gold in the arts, estimated in § 41 at upwards of 12,000,000L a year. FINAL REPORT. — PART II. 93 No doubt the adhesion of England, Grermany, and the United States, would be a very important addition of strength, and we do not deny that such a combination might for a considerable time be able to maintain the ratio adopted. Having regard, however, to the great uncertainty as to the probable future production of the mines, the large use of the precious metals in the arts, and to the number of countries which would still remain outside the combination, we doubt whether any given ratio could be permanently maintained. This doubt seems to be supported by the view expressed in § 118 of the foregoing Report. In considering the expediency of any international agreement, it must also be borne m mind that our banking arrangements and currency requirements are very different from those of other countries. (Signed) JOHN LUBBOCK. J. W. BIRCH. I wish to add for the sake, not of dissent, but of distinctness, that I do not believe that the change in the relations between gold and silver currencies has lowered English prices. (Signed) T. H. FARRER. M 3 94 EOYAL COMMISSION ON GOLD AND SILVER: PART III. Reasons for dissent' ing from Part. II. 1. We concur generally in that portion of the foregoing Report which is devoted to a statement of the facts relating to the subject of our inquiry, and of the various arguments which have been advanced in connexion with them. 2. We also concur in the opinion expressed in §§ 192-198 of Part I. of the Report, that the primary cause of the recent changes in the relative value of the precious metals is to be found in the abandonment, by the countries forming the Latin Union, of the free coinage of both metals into legal tender money at a fixed ratio. 3. But in considering the extent of the evils or inconveniences which have resulted from this step, and the possibilities of removing them, as well as those which may be expected to arise in the future if no remedy is applied, the divergence of opinion between our colleagues and ourselves becomes so marked that we have felt it necessary to draw up a separate statement of the conclusions to which we have been led. Evils arising from the Changed Relations of the Precious" Metals. Nature and extent of the evils arising from changed relations of gold and silver. 4. To the enumeration of these evils which is contained in §§ 4-16 of Part II. of the Report we have little to add. They are : — (a.) The evils . arising from fluctuations in the relative value of the two metals, which — i. Hamper the course of trade between gold and silver using countries ; ii. Stimulate abnormally the trade between silver-using countries to the prejudice of gold-using countries ; iii. Discourage the investment of capital in— and consequently retard the development of— -silver-using countries. (b.) The evils arising from the progressive and continuous fall in the gold price of silver, which, by its effects upon the exchange between gold and silver using countries, places the producers and merchants in the former country at a disadvantage as compared with those in the latter. (c.) The evils arising from a fall in the'gold prices of commodities, so far as such fall is due to monetary causes. (d.) The special evils which aflFect India. 5. From the Report of our colleagues we gather that in their view the existence of some o£ these evils may be considered as satisfactorily proved, but that as regards others, while admitting the serious character of the allegations which have been made they do not by any means consider them to be proved, and they are consequentlv not prepared to express any decided opinion upon them. We cannot therefore refrain from recording our conviction that the gravity of the evils above set forth has been much under-estimated in the foregoing Report, and that they do constitute such an impediment to the material prosperity both of this country and of India as urgently calls for a remedy. Fluctuations in exchange. Uvils arising from Fluctuations in ths Relative Value of the Precious Metals. 6. Taking first the evils resulting from fluctuations in the exchange between o-old and silver using countries, we agree in the views expressed by our colleagues in f 9 • '^ Bverything_ which hampers complete freedom of commercial intercourse between " two countries, or which imposes on it any additional burden, is undoubtedly an evil " to be avoided or removed if possible. If therefore a remedy could be devised to " accomplish this end without involving the risk of other disadvantages, there cannot " be two opinions that it would be worth while to apply such a remedy." We shall, at a later period, indicate a remedy which, in our opinion, fulfils the above condition. FINAL RKPOTiT. — PART III. 95 Evils affecting India, 7. We also concur in the view taken by our colleagues of the gravity of the evils Position cf which affect the G-overnment of India, and which they sum up in the following ^°^^^- words (§ 102) :— ' .r ^ & We have no hesitation then in expressing the conclusion that the changes in the value of the precious metals are causing important evils and inconvenience to the Grovernment of India, which are well worth the endeavour to remedy them, if a remedy can be devised which could be adopted without injustice to other interests, and without causing other evils or inconveniences equally great." 8. It is, however, under the two remaining heads that the principal divergence between our colleagues and ourselves arises. In our view a large proportion of the evil effects which are produced by changes in the relative value of gold and silver result from their action upon the international trade between gold and silver using countries. Evils arising from Fall in the Exchange between Gold and Silver using Countries. 9. Any change in the relative value of the two metals must be accompanied by a Fall in ex- corresponding change in the prices of commodities measured by them. change. In the present case there has been a fall in the gold price of silver, and this has been accompanied by a general fall of gold prices in this country, where gold is the standard. In India, on the other hand, where, in the opinion of nearly all the witnesses whom we have examined, the purchasing power of the rupee continues unimpaired, the prices of commodities measured in silver remain practically the same. A^ e have no evidence to show that silver has undergone any material change in relation to commodities, although it has fallen largely in relation to gold ; in other words, the same number of rupees will no longer, exchange for the same amount of gold as formerly, but, so far as we can judg^e, they will purchase as much of any commodity or commodities in India as they did before. It is easy to perceive the effect which this fact must have on all transactions and remittances passing between the two countries, as well as on the interests of the producers and exporters of commodities in both. ' It is commonly alleged that it gives to the Indian exporter of commodities to England an advantage over his competitor in England, which is said to be equal in effect to a bounty on his exports ; while it places the English exporter of commodities to India at a disadvantage, which is said to be equal to the loss that he would suffer by the imposition of a corresponding duty on his exports. We believe that, subject to the qualifications which we afterwards express, there is much force in both of these contentions. The most familiar, and, perhaps, the simplest illustration of our meaning may be found in the effect of the exchange on the export of wheat from India, and on the relative position of the growers of that commodity in either country. If, when the gold price of wheat is 40s. a quarter, the rupee, measured in gold, is worth 2s., the producer of wheat in India will receive 20 rupees for a quarter of wheat. If the gold price of wheat then falls 25 per cent, to 30s. a quarter and the gold price of the rupee falls 25 per cent, to Is. 6d., the Indian producer will still receive 20 rupees for his quarter, and they will purchase as much as they did before, because prices in India have remained practically the same. The position of the English grower, on the other hand, is materially changed. He will only receive 30s. instead of 21., and unless all other prices have fallen in the same proportion, he must be a loser. And the precise measure of his loss will be the difference between the purchasing power of 30s. at the present time and the purchasing power of 21. at the former period. If then the English and the Indian producer were competing upon equal terms, before the fall in the exchange occurred, the result will be to largely reduce the profits of the former and to leave the latter exactly where he was before. He is able to take the lower price of 30s. a quarter for his produce, instead of 40s., without loss to himself, and the market price of wheat in England is thus unduly depressed. A similar result ensues in the case of articles which are sent from England to silver- using countries, as for instance, in the case of cotton goods exported from Lancashire M 4 96 ROYAL COMMISSION ON GOLD AND SILVER: to India, where the effect of the fall in exchange is equally injurious to the English manufacturer. For example, cotton goods are sent to India, for which, in order to make a profit, the English exporter must receive a certain sum, say, 10,000?. With the rupee worth 2s., 10,000Z. is realised by the payment of Rs. 100.000. With the rupee at Is. 6d., Rs. 133,333 are required to realise that sum. Will the Indian importer give this greatly increased price for precisely the same article as he bought before ? Obviously not, because prices in India, as we have seen, remain the same, and the English manufacturer is in consequence obliged either to take the same silver price as formerly, viz., Rs. 100,000, which means a greatly lowered gold price, viz., 7,500?., or not to sell at all ; and in either case he undergoes a loss which must be traced directly to the fall in the gold price of silver. The industries which have suffered most from the fall in the exchange are naturally those which are most directly connected with the trade between gold and silver using countries, such, for example, as the cotton and the agricultural industries of the United Kingdom. We are not prepared to say, and it is not our view, that the fall in exchange can operate permanently as a bounty on Indian exports, or as a protective duty against imports ; but it is obvious- First, that the loss which it occasions to the producer in gold-using countries, whatever that may be, must continue to operate until there has been a genera] adjust- ment of the prices of commodities, or in other words, until all prices and all the incidents of production have on an average fallen in the same proportion. Secondly, that the measure of that loss is the difference between the purchasing- power of the higher price received for commodities before the fall and that of the price received at present ; and Thirdly, that the date of such a general adjustment is uncertain, but will probably be remote, and may be postponed for an indefinite period of time. Evils arising from the Fall of Gold Prices. Fall in gold 10. We have lastly to consider the evils arising from the fall in the gold prices of prices. commodities. The fact of a general fall of prices, or in other words, of an increase in the purchasing power of money in countries using a gold standard, can hardly be disputed. On this point we need only refer to the tables of index numbers given in § 49 of Part I. of the Report. 11. In § 47 of Part II. our colleagues express the view that " the greater part of " the fall has resulted from causes touching the commodities rather than from an " appreciation of the standard ; " and again in § 99, " we believe the fall to be mainly " due, at all events, to circumstances independent of changes in the production of, " or demand for, the precious metals, or the altered relation of silver to gold." From this view we feel bound to dissent. The importance of the question, whether the incapacity of the existing stock of gold to meet the currency requirements of the world arises from the fact that those currency requirements are increasing through the growth of commerce and of population, or through the monetary policy of particular nations, may easily be exaggerated. In our opinion it is almost impossible to distinguish between these two sets of causes. A great increase in the production of commodities means a great increase in wealth, and would ordinarily be attended with an increased demand for the standard metal. The prices of some commodities would fall because they were produced in increasing quantities ; the prices of commodities generally would tend to fall because there was an increased demand for the standard metal, and there are no means of saying how much of the alteration in price in any particular case is due to increased production and how much to increased demand for the standard. In any case, however, we differ from the view taken by our colleagues, to which we have above referred, for the following reasons : — In the first place we find no proof that the supply of commodities generally has increased, or that the cost of production has diminished at a greater rate in the years which have elapsed since the rupture of the bimetallic par than was the case in periods of like duration antecedent to that date. FINAL REPORT. PART III. 97 On the contrary it would seem to be the case that it was immediately after, and no doubt in consequence of, the great discoveries of science, such as the inventions of steam, of electricity, the telegraph, &c., that the most marked advances in production were apparent. The cost of production was lessened and the facilities were increased at that time by the introduction and the aid of machinery in a greater degree than they have ever been since then, and yet there is no record of any permanent or general fall in prices similar to that which is the subject of investigation now. Secondly, if gold prices have fallen solely owing to increased supply of commodities, silver prices should have fallen to the same extent, which is not the case. And the possible contention that a similar fall in silver prices has been averted by increased supplies of silver seems to us to be inconsistent with the figures given in §§ 27 and 36 of Part I. of the Report, which show that, as regards countries outside of the United States, while .^he supply of gold has fallen off by 15,000,000L yearly since 1866-70, the annual supply of silver has increased by less than 4,500,000L For these reasons we are unable to attach as much importance as our colleagues to the operation of causes affecting commodities in producing a general fall of prices, which is estimated to average about 30 per cent. ; and we think it is incumbent upon those who take that view to explain why prices did not fall in a similar degree at the earlier periods to which we have referred. We are not insensible to the fact that facilities for production are habitually increasing, and the cost of production is constantly becoming less. But these factors have always been in operation since the world began, and while we recognise their tendency to depress the prices of commodities, they are not, in our opinion, sufficient to account for the abnormal fall in prices, which has been apparent since the rupture of the bimetallic par, and only since that time. Moreover, if industrial progress during the last 15 years has produced this enormous fall of prices, we ought to anticipate a further fall of equal magnitude as a consequence of industrial progress during the next 1 5 years. Is this a conclusion which we can accept ; and, if so, can we contemplate it with equanimity ? Even assuming, then, that it is possible to maintain the distinction drawn by our colleagues, we are led to the conclusion that, while some effect is no doubt due to to causes affecting commodities alone, it is to monetary causes that the larger share of the general fall must be ascribed; and a fall of prices from these causes we consider, for reasons given at greater length in § 94 of Part I., to be a serious evil. In support of this opinion we may refer to the views which were expressed in the final Report of the Royal Commission upon the Depression of Trade in the following words, to which we think it is desirable to recall attention : — " We expressed in our third Report the opinion that this fall in prices, so far as it has been caused by an appreciation of the standard of value, was a matter deserving of the most serious independent inquiry, and we do not, therefore, think it necessary to investigate at length the causes which have brought it about ; but we desire to give it a leading place in the enumeration of the influences which have tended to produce the present depression." Under an appreciating standard, those who are enjoying acquired wealth benefit, for a time at least, at the expense of those who are acquiring it, and the active and enter- prising members of society suffer. In this way we believe that an appreciating standard of value exercises an injurious effect on the rate of increase of the total wealth of the community. 12. There appears to us to be sufficient evidence (to which we shall refer later on when we deal in detail with the several questions contained in our order of reference) to show that the fall of prices and its resulting evils have affected all classes of the population (with the exception of those in the enjoyment of fixed incomes payable in gold), from the manufacturers and producers down to the wage-earners ; but, in our opinion,' it is the latter class which have the most direct and immediate interest in the adoption of any measure which will re-establish the_ comparative stability of the standard of value, such as it was before the recent divergence in the relative value of the precious metals. Effects of the Changes on certain specified Interests. 13, Passing next to the effects of the changes which we have described upon the various matters and interests specified in our order of reference, we are directed in A 66136. N 98 EOTAL COMMISSION ON GOLD AND SILVER: Kemittances of the Government of India. Private re- mittances from India. Producers in India. Merchants in India. Indian tax- payers. the first place to consider their bearing upon the remittances of the Government of India. We have already expressed our concurrence with the view taken by our colleagues of the diflB.culties arising under this head, 14. As regards " payments under old or fixed contracts," it is manifest that such contracts, if dating from a period antecedent to the fall in the gold price of silver, become more onerous at each successive stage of the fall, and that the burden of " new or current contracts " will increase in the same manner if the fall proceeds further. In both cases the uncertainty attaching to the future must be a matter of great embarrassment to the Government ; but it should be observed that in the case of new or current contracts, such as those for the purchase of commodities, which do not extend over any long period of time, the evil caused by the fall is mitigated, but only in so far as the prices of the commodities, in respect of which the contracts are made, have fallen as much as, or more than, the gold price of silver. 15. " Persons in India who have to make remittances home in gold " have suffered in the same manner and to the same extent as the Government. Their remittances, when converted into gold, undergo an apparent loss at the present time of 30 per cent. The loss is no doubt alleviated ^ro tanto by any fall in the gold prices of the articles or services for the purchase of which the remittance is employed ; but we do not think that complete compensation is obtained in this way, and in comparison with persons receiving fixed salaries in this country, every person receiving a similar salary in countries where silver is the standard undoubtedly suffers a, loss of about one-third on all sums which he remits home. Where the remittance is made to cover a fixed charge, or to purchase commodities of which the gold price has not fallen, the loss is heavy. When the rupee was worth 2s. a fixed charge of lOOZ. could be met by remitting Rs. 1,000. At the present time the amount required would be nearly Rs. 1,500, an increased burden on the remitter of 50 per cent. 16. We are next directed to consider the position of " the producers, merchants, and taxpayers of India,." {a.) As regards the Indian producer, he gains through the operation of the causes set forth in § 9 of this Report ; and he will continue to gain until all the incidents of production in gold-using countries shall have accommodated themselves to the new level of prices. On the other hand, both the producer and exporter in India must suff'er from the uncertainty of the exchange with gold-using countries, resulting from variations in the relative value of the precious metals. {h.) The position of the merchant in India does not seem to have been materially affected. So far as the export trade of the country may have been stimulated by the causes to which we have referred above, he has benefited. So far as the import trade may have been hampered by the operation of similar causes in the converse direction he has sustained a loss. But it cannot be doubted that, as in the case of the producer, the constant fluctua- tions in exchange must have introduced an element of risk and uncertainty into trade which has been pro tanto prejudicial. (c.) As regards the position of the taxpayer in India, it is obvious that the necessity of making increased remittances in discharge of gold debts compels the Government to maintain taxation above what it would be if no fall in the value of the rupee had taken place. The taxpayer, therefore, considered exclusively as such, is a loser. He has to pay a larger number of rupees than he would if, instead of Is. 4i., the rupees were worth Is. 10\d. At the present rate of exchange the annual burden to India is represented by a sum of about five crores of rupees. This amount, constituting as it does about one -tenth of the total revenue, properly so called, of the Government of India, might either, if the rupee were at its former value, be remitted, thus relieving the people of India from a heavy amount of taxation, or be expended in the further prorootion of public works, education, and other important measures for the improvement of the country. This large sum has been sometimes represented as a loss to the Government but not to the people of India. The distinction is, in our opinion, untenable. lu every FINAL r.F.PORT.-PART ITI. 99 coixutry finance is the most important business of government. But in no country is it so important as in India. Yet in India we maintain a system of currency such that, m a time of comparative peace and growing commerce, its administration finds itself involved in as many financial uncertainties and embarrassments as if it were engaged in a costly war. Again, it is sometimes said that the loss to India is nominal, and not real. But if, as we believe, the divergence in the values of the precious metals is due to an increase m the value of gold, the loss to India is most real. For she has to pay the same quantity of gold as before, and that quantity is worth more. We find in consequence that, after repeated eff'orts to reduce expenditure, the Government of India have been at last compelled to resort to fresh taxation of an undesirable kind, in order to restore the financial equilibrium, and that, unless some improvement in this respect shortly takes place, it will become india pen sable, in order to avert financial disorder, to adopt further measures, which are, in their opinion, open to grave objection, both on financial and political grounds. We regret to add that however grave the present financial position of the Govern- ment of India may be, the future prospect is one which we cannot regard without far more serious apprehension. We are very far from attempting even to form an opinion as to what the future relations of the two precious metals may be if they continue, as at present, without any fixed ratio between them ; but it is impossible to shut our eyes to the possibility of a still further relative depreciation of silver or appreciation of gold, and a con- sequent increase of the difficulties by which the Government is now beset. 17. As regards the merchants and manufacturers at home who trade with India, Merchants we have already indicated in general terms the mode in which their interests are and manu- aff'ected. wJ'tradtn Both English and Indian producers have had to submit to a lower gold price in the ^j^jj j^^jjj English market ; but as this lower gold price produces the same number of rupees as the higher gold price did before, the Indian producer has not suffered, while the English producer, from the causes previously mentioned, has undergone a loss. To whatever extent this may have been the case, we think that the trade between the United Kingdom and India has been affected by the recent monetary disturbance ; but, beyond this, we doubt whether any very marked efi'ects have been produced by it, except bo far as trade has been checked and restrained from its natural expansion by the uncertainties and insecurity which have doubtless exerted an unfavourable infliience. The large increase in this trade during the period under consideration is often adduced as a proof that no such adverse influence can have been in operation ; but we think that this is sufficiently explained by other causes, such as the comparative prosperity of India, the development of her railway system, the abolition of import duties, which has practically made her a free port, the reduction in transport, and the facilities of communication with Europe due to the Suez Canal. We also think that, had it not been for the monetary disturbance, the trade would have assumed still larger dimensions. 18. Our attention is next directed to the effects of these changes upon the interests Trade of the of the United Kingdom. United As regards trade with silver using countries other than India, we have only to point . u^ th^r out that the views which we have expressed with regard to India are, so far as silver-using they concern trade, of general application to all silver-using countries ; but we countries, observe that, in marked contrast with our Indian trade, both the import and export trade with other silver-using countries appears to have declined in recent years. One feature in this general decline of trade deserves special notice on account of its eff"ect upon the manufacturing industry of Lancashire. A serious check appears to have been given to the growth of the exports of cotton yarn to China and Japan, owing to the rapid increase in the exports from India to those countries. The facts are given m § 76 of Part I. of the Report, from which it appears that the exports ^rom India increased, between 1876-77 and 1886-87, from 7 900,000 lbs. to 91,800,000 lbs., or about 1,058 per cent. ; and the returns for j887_!8 show a still further increase. The exports from the United Kingdom, on the other hand, to China, Hong Kong, and Japan, increased steadily, between 1877 and 1881, from 33,000,000 lbs. to 47,400,000 lbs. ; but from the latter year they declined to 26,900.000 lbs. in 1886, though they rose again slightly in 1887 to 35,350,000 lbs. N 2 100 BOYAL COMMISSION ON GOLD AND SILVER : The competition of the Indian spinning mills of course makes itself felt in the homt; markets of that country ; and there is some evidence that our trade with the East in coarse yarns has entirely left us. The natural advantages which India derives from being itself the country where the raw material is produced, and from her close proximity to the markets afforded by the silver-using countries in the East, are thus enhanced by the additional advantages derived from a common standard, free from the fluctuations to which the trade between India and gold-using countries is subject. The divergence between the value of gold and silver, therefore, in practice con- stitutes an advantage to the producer in India, not only in so far as he produces for the markets of gold-using countries, but in so far as he competes with the manufacturers of those countries in the neutral markets of siiver-using countries. Foreign and 19. But it is upon the foreign and internal trade of the United Kingdom, and the mternaltrade industrial condition of the country generally, that we think the recent currency changes Kinedom. tave produced the most injurious results. We must not, however, be understood as implying that in our opinion the depression which has affected the trade and industry of the country in recent years is entirely due to these changes. Other causes have no doubt been at work ; but w-e think that monetary causes have also operated to a considerable extent. 20. In our view the magnitude of the evil arising from the existing relations between the precious metals is due to the facts, (a) that the commerce of the world is now conducted under two distinct standards, instead of one as was formerly the case; (h) that those two standards have, by being dissociated from each other, lost the important quality of relative stability ; and (c) that the effect upon the trade and industry of the United Kingdom has been that of an appreciating standard of value, which, for reasons above given, we consider to be a serious evil to the industrial and working classes. In this respect we are unable to draw any distinction between the foreign and the internal trade of the country ; the evils of an appreciating standard must obviously apply equally to both. 21. In regard to our foreign trade we would call attention to the falling off in value both absolutely and relatively to population. This reduction of value would, of course, be immaterial if the cost of production had decreased in the same proportion, and if retail prices had followed the fall in wholesale prices. But this does not appear to have been the case. Evidence of 22. The evidence of the income tax returns given in § 55 of Part I. of the Report income tax points in the same direction. Notwithstanding a large increase both in population and leturns. i^ the production of nearly all commodities, the profits which come under the notice of the tax collector are scarcely larger than they were 15 years ago, and, what is more important, the rate of increase has materially fallen off. From 1874 to 1886 the increase in the gross amount of property and profits assessed to income tax was not quite 15 per cent. In the preceding 12 years, from 1862 to 1874, the increase was 56 per cent. oHabou^and ■^^' ^"™™g ^^^^ *o ^^^ employment of labour, we think that the Commission might rate^of"'^'^'^ with advantage have taken more evidence upon this subject, but we desire to call wages. special attention to the evidence of Mr. Fielden, who, besides being personally acquainted with the condition of the labouring classes in the manufacturing districts of Lancashire and Yorkshire, was able to place before us much valuable information with regard to the employment of labour in the country at large. He has obtained statistics from 10 of the largest trades unions in the country with regard to the number of their members out of employment, and the amount of support given to them out of the society funds. The result is, that while the average number of members in these societies in the years 1871-75 was 98,640, the average number out of work was 2,150, or 2-18 per cent., and the average cost 44,852Z. per annum. In the years 1882-86, the number of members averaged 139,338, the number out of work 10,063, or 7-22 per cent., and the average cost 162,494Z. per annum. 24. The general conclusions which we draw from his evidence are, not only that the rate of wages has fallen, but that the amount actually earned, even by those who FINAL REP01tT.--PAKT ITI. 101 are nominally at work, has, owing to irregularity of employment, fallen in a still greater degree, and ttat the number of persons altogether out of employment has distinctly increased of late years. The important question for the labourer is not what he earns per day or per week, but per year. 25. The reduction in profits and wages to which we have above alluded appears to us to be fully corroborated by the diminution in the purchasing power of the country shown in the statistics of our foreign trade. In 1873 the total value of the imports into and exports from the United Kingdom was 211. 4s. Id. per head of population. In 1886 it was 161. 17s. If the fall in prices had been caused solely by reduced cost and increased supply, the money demand of the population should, in our view, have remained the same, and the total value of the trade should have been maintained. 26. We may here notice another important effect of an appreciating standard, which Increasing arises from the increased burden of all fixed charges payable in gold, such as the burden of National Debt, perpetual debentures, leases for long terms of years, annuities, (.j,^j„f° pensions, and other similar charges which cannot be reduced or terminated. With every rise in the value of gold the weight of this burden upon the industry of the country increases. The loss to the nation at large under this head must be of a most serious kind, the only class which benefits being the small number of annuitants, estimated at 250,000. policy. 27. We wish to direct attention also to another consequence which has resulted Check to from the rupture of the bimetallic par, and the unsettled relations between the two free trade metals. We refer to the check which has been given to the free trade policy, and the tendency to reactionary legislation in favour of protection, which have been manifested in recent years, and to which, we think, the cause in question has largely contributed. A period of falling prices is always unfavourable to the removal of commercial restric Lions and of protective duties ; and in the present case this general depression has been aggravated in the gold-using countries by the advantages in competition which have been enjoyed by silver-using countries, in the manner which we have explained in § 9 of this Report. So long as unequal conditions of production and exchange are created and fostered by monetary legislation, it will be difficult to prevent attempts to counteract their eflfects by protective or countervailing tariff's. On the other hand, the financial embarrassment which has been created in British India must raise the question of a return, for revenue purposes, to the system of import duties which was abolished with such successful results in 1879 and 1881, and which, it was thought, was finally removed from the path of Indian progress. The interests of any country which is committed to a free trade policy are especially and deeply interested in removing, so far as it lies in her power, a cause which operates in making the abandonment of a protective system more and more difficult by other countries ; and it appears to us that the adoption of a common international standard of value is an essential condition of the fulfilment of this policy. 28. We think that the above remarks upon the evils affecting both the United Kingdom and India, if taken in connexion with the more detailed statement in Part I. of the Report, will sufficiently indicate our view as to their nature and gravity • and that they are largely due to the currency changes which have taken place in the years immediately preceding and following 1873. , , , We think that too much stress cannot be laid upon the novelty of the experiment which has been attempted as the result of the above changes. That experiment consists in the independent and unregulated use of both gold and silver as standards of value by the different nations of the world. We are strongly of opinion that both metals must continue to be used as standard money the results of using them separately and independently since 1873 have been most unsatisfactory, and may be positively disastrous in the future. .,,.,, It cannot be questioned that until 1873 gold and silver were always effectively hnked by a legal ratio in one or more countries. It is equally indisputable that the relative value of the two metals has been subject to greater divergence since 1874 than during the whole of the 200 years preceding that ^ N 3 102 ROYAL COMMISSION ON GOLD AND SILVER date, notwithstanding the occurrence of variations in their relative production more intense and more prolonged than thbse "which have been experienced in recent years. 29. In 1873-74 the connecting link disappeared, and for the first time the system of rating the two metals ceased to form a subject of legislation in any country in the world. The law of supply and demand was for the first time left to operate independently upon the value of each metal ; and simultaneously the ratio which had been main- tained, with scarcely any perceptible variation, for 200 years, gave place to a marked and rapid divergence in the relative value of gold and silver, which has culminated in a change from 15^ to 1 to 22 to 1. Proposed remedy — international bimetallism. Answers to objections which have been urged. Proposed Eemedy. 30. It appears to us impossible to attribute the concurrence of these two events to a merely fortuitous coincidence. They must, in our opinion, be regarded as standing to each other in the relation of cause and efiect. We cannot, therefore, doubt that if the system which prevailed before 1873 were replaced in its integrity, most of the evils which we have above described would be removed ; and the remedy which we have to suggest is simply the reversion to a system which existed before the changes above referred to were brought about ; a system, namely, under which both metals were freely coined into legal tender money at a fixed ratio over a sufficiently large area. The effects of that system, though it was nominally in force only within a limited area, were felt in all commercial countries, whatever their individual systems of currency might be ; and the relative value of the two metals in all the markets of the world was practically identical with that fixed by the legislation of the countries forming the Latin Union. As regards the possibility of maintaining such a system in the future, we need only refer to the conclusion at which our colleagues have arrived in § 107 of Part II. and with which we entirely agree, namely, that "in any conditions fairly to be " contemplated in the future, so far as we can forecast them from the experience of " the past, a stable ratio might be maintained if the nations we have alluded to were " to accept and strictly adhere to bimetallism at the suggested ratio. We think " that if in all these countries gold and silver could be freely coined, and thus become " exchangeable against commodities at the fixed ratio, the market value of silver as " measured by gold would conform to that ratio, and not vary to any material extent." We also agree generally with the views expressed by our colleagues in §§ 109 and 110 as to the extent to which such a system, if adopted and maintained, would remedy the evils complained of ; and we would call attention to the additional advantages referred to in §§ 111 and 119 as likely to accrue from the adoption of an international bimetallic system of currency. 31. It only remains for us, therefore, to give our reasons for thinking that our colleagues have attached undue importance to the several objections which have been urged against the proposed change. These objections are as follows : — (i.) That " the change proposed is tremendous," and that its " very novelty would excite apprehensions which in themselves might not be without their danger." To this we reply that the system of currency which we recommend was in existence in other countries for many years before 1873, and its effects practically extended to all the commercial countries of the world. We are not aware that so long as it was maintained in its integrity any evil results ensued. The only novelty in our proposal is that the United Kingdom should join with the other countries specified below in § 35 in re-establishing a bimetallic system. We are therefore unable to under- stand how, in view of the experience of the past, any ground for serious apprehension can exist. (ii.) That the position of the United Kingdom, and especially of London, as the commercial or financial centre of the world, would be endangered. This position, it is urged, is due to the fact that the standard of value in this country is a definite quantity of a particular metal, and that persons entering into transactions, expressed in pounds sterling, consequently know with absolute certainty what it is that they will have to give or receive. This certainty, it is said, would disappear if an option were given to debtors, as is. proposed under the bimetallic system, of tendering either one of two metals. PINAL BEPORT. — PART III. 103 To this we reply — {a.) That the commercial and financial pre-eminence of London datep back to a period anterior to the establishment of the single gold standard in this country, and a period when, as a matter of fact, the currency of the country was bimetallic ; (&.) That if the transactions of other countries are now largely carried out by means of bills drawn upon London, it is because London is, for many reasons, the best market for such bills, and that this fact is not likely to be affected by our joining with other nations in a common system of currency ; (c.) That the option conceded to debtors under the bimetallic system could rarely have any practical effect, inasmuch as if that system were established and maintained in its integrity, there would be no appreciable inducement to select one metal rather than the other. (iii.) That if bimetallism resulted in a fall in the value of gold, England as a country entitled to receive large gold payments would lose, and other countries would gain at her expense. In reply to this objection we need only refer to the arguments stated in § 96 (k.) of Part I. of the Report, to which we have nothing to add. (iv.) That the bimetallic system depends for its successful working upon international support, and that, for adequate or inadequate reasons, other nations would, sooner or later, cease to adhere to it. To this we reply {a) that no sufficient motive can be suggested for the secession of any of the contracting powers ; (b) that provided the system was maintained over a sufficiently large area the secession of one or more powers would not be of vital importance ; (e) that in any case the seceding power would cause more injury to its own subjects than to those of other countries ; and (d) that such an objection applies with equal force to all international agreements - (v.) That the tendency, which is observable among the more civilised nations, to use gold rather than silver, would be likely, notwithstanding the existence of a bimetallic system, to encourage the accumulation of that metal, and the creation of an agio upon it, which would thus disturb the ratio fixed by law between the two metals. To this we reply that the tendency above mentioned is mainly the result of the apprehensions and uncertainty attending upon the existing relations between the two metals ; and that all inducement to accumulate gold would cease with a return to a stable ratio of vahie between them. (vi.) That there might be a tacit refusal of the people of a country to accept both metals as legal tender, and that contracts would be largely made in one of the two metals only. The question raised in this objection is rather a matter of opinion than of argument, and we can only say that we do not share the apprehensions of those who foresee any serious difficulty arising from such a course. Even if it be admitted that it would be largely adopted we do not think that, so long as the legal ratio between the two metals continued in force, any real difficulty could occur. But we may point out that the objection appears to assume, what has, of course, never been suggested, that the bimetallic system could be introduced into a country without the consent of those sections of the population who would be most interested in the adoption of such a change. We are satisfied that no such measure as the introduction of the double standard could be passed into law in this country at least, without such an amount of popular support as would practically prevent the possibility of the adoption of such a course as is supposed in the objection we are noticing. (vii.) That if debts contracted in gold could be paid in silver, the claims of all creditors would unjustly suffer, and that the adoption of a bimetallic system would thus amount to a breach of faith. This last objection is that which appears to us to call for the most serious con- sideration, and we are not disposed to underrate its importance. If it be right that a government should adopt and impose upon its people a legal standard of value, it is clearly its duty to provide, as far as possible, that such standard shall not be wanting in its most essential attribute, viz., that of the greatest attainable stability. . Recent experience has shown that by the monetary policy of Germany, the Latin Union, and the United States, over which this country had no control, the standard of value 'in the United Kingdom has been gravely impaired and its future stability, as well as that of the silver standard of Indifi, seriously endangered. N 4 104 ROYAL, COMMISSIOpr ON GOLD AND SILVER : Dangers likely to arise if no remedy is applied. Main features of proposed remedy. Other remedies suggested. In these circumstances it is evident that if the Government, by its direct action in changing the standard, injured the interests of creditors and disturbed existing contracts, it may, by abstaining from action, injure the interests of debtors to an equal or greater extent, and affect future contracts. It appears to us that if it is wrong in a government to make any change in its standard of value on the ground that it would disturb the relations of debtors and creditors, it must be equally wrong to abstain from any action which it is in its power to take, by which a disturbance in those relations may be averted. But it is essential to observe that this objection, whatever force attaches to it, is not directed against the policy of bimetallism as such, but merely against the return to the ratio of 15| to 1, or some other ratio diflPering much from the current relative value of gold and silver. It must also be recollected that it cannot be urged by those who have insisted that the fall in prices is due to causes primarily affecting commodities, and not to the appreciation of gold. If the rupture of the bimetallic par has not led to the appre- ciation of gold and to a fall in prices, there appears to be no sufficient reason for supposing that its renewal would affect the value of gold or cause a rise in prices. 32. For these reasons we do not think that, after giving due weight to the foregoing objections, they are such as ought to be allowed to stand in the way of such a policy as we are prepared to recommend. Neither metal alone exists in sufficient quantity to serve as a sole standard without causing such a change in the level of prices as to amount to a financial and commercial revolution ; but we cannot doubt that if a sufficiently wide area of agreement between the leading commercial countries can be secured, this most important result may be effectually attained, and a great international reform successfully accomplished. 33. Further, we are strongly impressed with the conviction that whatever evils may be expected to flow from a return to the status quo ante, the evils both present and prospective of the existing situation are infinitely more serious. Failing any attempt to re-establish the connecting link between the two metals, it seems probable that the general tendency of the commercial nations of the world will be towards a single gold standard. Any step in that direction would, of course, aggravate all the evils of the existing situation, and could not fail to have a most injurious effect upon the progress of the world. A further fall in the value of silver might at any moment give rise to ftirther evils of great and indefinite magnitude in India, while a further rise in the value of gold might produce the most serious consequences at home. 34: No settlement of the difficulty is, however, in our opinion, possible without international action. The remedy which we suggest is essentially international in its character, and its details must be settled in concert with the other Powers concerned. It will be sufficient for us to indicate the essential features of the agreement to l)e arrived at, namely — (1.) Free coinage of both metals into legal tender money ; and (2.) The fixing of a ratio at which the coins of either metal shall be available for the payment of all debts at the option of the debtor. 35. The particular ratio to be adopted is not, in our opinion, a necessary preliminary to the opening of negotiations for the establishment of such an agreement, and can, with other matters of detail, be left for further disciassion and settlement between the parties interested. "We therefore submit that the chief commercial nations of the world, such as the United States, Germany, and the States forming the Latin Union, should in the first place be consulted as to their readiness to join with the United Kingdom in a conference, at which India and any of the British Colonies which may desire to attend should be represented, with a view to arrive, if possible, at a common agreement on the basis above indicated. 36. We have indicated what appears to us to be the only permanent solution of the difficulties arising from the recent changes in the relative value of the precious metals, and the only solution which will protect this and other countries against the PINAL REPORT. PART III, 105 risks of the future. At the same time we approve the recommendations of our colleagues in §§ 134-137. "We do not attach much importance to their probable direct effects ; but their influence at the present time would be beneficial, while their adoption would place no obstacle in the way of a more satisfactory solution at a future date, and might possibly facilitate it. All which we submit to Your Majesty's gracious consideration. (Signed) LOUIS MALLET. AKTHUR JAMES BALFOUR HENRY CHAPLIN. D. BARBOUR. W. H. HOULDSWORTH. SAMUEL MONTAGU. Geo. H. Murray, Secretary. October 1888. A 56136. o 106 ROYAL COMMISSION ON GOLD AND SILVER: Note by Sir Louis Mallet. 1. I have signed the foregoing Eeport (Part III.) because I concur generally in its conclusions and recommendations, but as it does not adequately represent the_ reasons which have led me to their adoption, and still less the reasons which have obliged me to dissent from the main conclusions of Part II., I add the following supplementary observations : — 2. The facts as to the recent changes in the relative value of the precious metals have been as fully set forth in the General Report as the circumstances of the case appear to require. 3. In considering their nature and causes three alternatives are presented in the order of reference : — There may have been — (a.) A depreciation of silver ; (b.) An appreciation of gold ; (c.) A com^bination of both causes. 4. I must here observe that it is necessary to distinguish between the terms "appreciation" and " depreciation," as applied to the precious metals in their relation to each other, and in their relation to commodities. To whatever cause it is to be attributed, the relative value of the two metals to each other had not for many years previous to 1874 been subject to much variation ; and in their relation to commodities they have therefore risen and fallen together, with a corresponding but converse fall or rise in the gold and silver prices of commodities. It has, therefore, been customary, in speaking of the appreciation or depreciation of the precious metals, to consider their relation to commodities, and not to each other. 5. But although any divergence in value between gold and silver must be represented by an equal divergence between gold and silver pricea, it is evident that in such a case either metal may appreciate or depreciate in relation to the other, while undergoing no change in relation to commodities. It becomes necessary, therefore, from this point of view, in order to ascertain the efiPect of such divergence upon the relation of either metal or of both to commodities, to consider separately the cause or causes of the divergence between the two metals " inter se," and the cause or causes of the divergence between gold and silver prices. 6. With respect to the relations of the metals inter se, 1 agree in the conclusion stated in paragraphs 188-195 of Part I. of the Report, that the primary cause, of the recent changes is to be found in the abandonment by the countries forming the liatin Union of the free coinage of both metals into legal tender money at a fixed ratio. 7. I am unable to believe that the increased supply of silver and the diminished supply of gold during recent years could have caused the divergence in value between gold and silver which has taken place if that system had been maintained. Changes in the supply of the two metals of much greater magnitude in former times do not appear to have had an important influence in controlling their relative value ; and in support of this view I need not do more than refer to the following figures taken from § 21 of Part I. of the Report. NOTE BY SIK LOUIS MALLET, 107 Relative Value of Production and Market Price of Gold and Silver in the under-mentioned periods. Period. 1801-10 1811-20 1821-30 1831-40 1841-50 1851-55 1856-60 1861-65 1866-70 1871-75 1876-80 1881-85 1888 Ratio of Value of Production. Ratio of Market Value. Silver. Go: •227 to •048 ■055 •865 •899 •288 •292 •386 •44 •710 •794 •030 Silver. Gol 15 15 15 15 15 15 15 15 15 15 17 18 22 •61 to •51 „ •80 „ ■75 „ •83 „ •41 „ •30 „ •40 „ •55 „ •97 „ •81 „ •63 „ It will be observed that during the first 70 years of the century, although the quantities of the two metals produced varied in relative value from 3^227 to 1 to "44 to 1, their value in the market varied only between 15 •41 to 1 and 15 •SS to 1 ; but between 1870 and 1885, with much less marked variations in relative production, the relative value of the two metals in the markets fell from 15*55 to 1 to 18-63 to 1, and at the time we write it is nearly 22 to 1. In the face of these facts it appears to me impossible to attribute the divergence of value between gold and silver to the comparatively slight change in the conditions of supply, irrespective of the altered conditions of demand. Demand. m 8. The demand for gold and silver largely depends upon their use as " money its several functions, and for this purpose both metals have hitherto been found, and probably will continue to be found, indispensable, from the diversity of their uses, and also from the insufficiency in quantity of either one, or the other, alone. The distribution of these two metals between the nations of the world has been determined by various considerations ; but as one of the most important of their uses as money has been to serve as a standard measure of value with free mintage, or liable only to a seignorage representing its cost, it is obvious that the selection of one or the other for this purpose has exercised a direct influence on the value of the metal so selected. Until recently the attempt has never been abandoned, either by ihe separate action of particular countries, or by a group of States such as that of which the Latin Union is composed, to neutralize, as far as possible, the evils and inconveniences of two- standards of value with no connecting link between them, by establishing a fixed legal ratio of weight, at which they should always be exchangeable one for the It inay be stated generally that during the last century the national unit of coinage which constituted the standard of value in the principal countries practically rested on both metals, silver being usually the nominal standard with gold rated to it, at the discretion of each Grovernment. In the United Kingdom, from 1717 to 1816, this system prevailed, the ratio of gold to silver having been fixed at 1 to 15-21. In the United States of America the double standard was originally adopted m 1786 with a ratio of 1 to 15*25 ; changed in 1792 to 1 to 15, and in 1834 to 1 to 16. In 1803 the double standard, with a ratio of 15^ to 1, was definitively adopted by France, and in 1865 thel formation of the Latin Union, ultimately consisting of France', Italy, Belgium, Switzerland, and Grreece, extended and confirmed it. The changes in monetary policy which have taken place during the last 15 years, both in Europe and in the United States of America, have on the one hand largely increased the area in which gold is used as a standard of value, while diminishing that in which silver is so used, and on the other, by entirely removing the restraining influence of legislation on the relations of the two metals, have left the law of supply 2 108 KOYAL JCOMMISSION ON GOLD AND SILVER; and demand to operate independently on the value of each, instead of setting in motion a compensatory or equilibratory action upon both. The effect has, in my opinion, been to cause an increased demand for gold and a relatively diminished demand for silver. 9. An examination of the international movements, of gold and silver during recent years appears to support this view. In dealing with the statistics of the export or import of the precious metals, it must be recollected that they are necessarily imperfect, and that no reliance can be placed upon any apparent movements, which are not of considerable magnitude, distinct and well-defined, but they nevertheless afford general indications of much significance. 10. It will be convenient to give the first place to the United States. Average of the Financial Years. 1851-55* 1866-60* 1861-63* 1864-70 1871-75 1876-80 1881-85 Net Imports of Gold. Dollars. 11,750,000 21,070,345 Net Exports of Gold. Dollars. 34,280,000 49,204,000 19,498,000 47,639,000 40,926,000 * Includes silver, but to the end of 1860 the amount was mainly gold. The evidence in this case is most remarkable. Up to 1876 the United States yearly supplied large quantities of gold to the rest of the world. Since 1876 she has been receiving gold from other countries. The influence which stopped the flow of gold from the United States, and reversed the direction of the current, had its origin in that country. It was therefore a new demand for gold, and must have tended to raise the value of o-old. Let us now consider England : — Average for the Years 1858-60 1861-70 1871-76 1877-80 1881-85 1886 - Net Imports of Gold. £ 3,795,000 5,546,000 3,345,000 Net Exports of Gold. 1,400,000 468,000 391,450 The evidence in the case of England is just as distinct as it is in the case of the United States. Up to the end of 1876 there was a large and continuous flow of gold into the country ; since 1876 the supply has ceased, and England has been losing gold. Next as to France : — Average for the Years 1851-60 1861-70 1871-73 1874-78 1879-84 Net Imports of Gold. Francs. 318,435,000 191,014,000 415,472,000 Net Exports of Gold. Francs. 125,115,000 70,696,000 NOTE BY SIE LOUIS MALLET. 109 Dr. Soetbeer has given grounds for doubting the accuracy of the French statistics of the import and export of the precious metals ; but, allowing for the disturbance caused by events in connexion with the Franco- Grerman war, the flow of bullion is in harmony with what we observe in the case of England, and the features of the change are so marked that we may feel sure that, though they might be modified, they would not be obliterated, if more accurate statistics were available. In the case of Germany the figures given are those of the German Customs District, which are acknowledged not to be complete, but are nevertheless significant : — Averaafe nf Years Ket Imports of Gold. 1872-79 1880-85 Mai-ks. 68,126,000 Net Exports of Gold. Marks. 11,483,000 For the other nations it is unnecessary to give figures in detail. Italy took special measures to accumulate gold, which has since shown a tendency to leave that country. Austria-Hungary has also accumulated gold, and so have the Scandinavian countries. In all these cases the flow of gold was intended to meet a new demand, and its influence would be in the direction of lowering prices. Let us now turn to the Bast, and consider the evidence of the flow of silver to and from those countries. • 11. Mr. Giffen of the Board of Trade has given the following table, showing the imports and exports of silver into and from China in her trade with the United Kingdom, France, British India, and the United States : — Year. 1862. 1864 1865- 1866 1867- 1868 1869- 1870 1871- 1872 1874- 1875 1876- 1877 1878- 1879 1880- 1881 1882- 1883 1884- Net Imports of Silver. £ 2,598,000 2,080,000 1,131,000 141,000 2,064,000 3,806,000 5,348,000 3,254,000 1,581,000 1,205,000 2,105,000 Net Exports of Silver. 3,180,000 3,967,000 2,403,000 43,000 2,943,000 3,637,000 745,000 29,000 189,000 110,000 It will be seen that the direction of the current was reversed after 1872 ; China was losing silver up to 1872, and after that year she began to import it. The change appears to indicate the efi'ect both of the reduced dem9,nd for silver elsewhere, and of its increased production. O 3 110 EOTAL COMMISSION ON GOLD AND SILVER: The figures of the net imports of silver into India are as follows : — Years. Net Imports of Silver. 1855-56 1856-57 - 1857-58 1858-59 - 1859-60 1860-61 - 1861-62 1862-63 - 1863-64 1864-65 - 1865-66 1866-67 - 1867-68 1868-69 - 1869-70 Es. 82,000,000 111,000,000 122,000,000 77,000,000 111,000,000 53,000,000 91,000,000 126,000,000 128,000,000 101,000,000 187,000,000 70,000,000 56,000,000 86,000,000 73,000,000 Years. 1870-71 1871-72 1872-73 1873-74 1874^-75 1875-76 1876-77 1877-78 1878-79 1879-80 1880-81 1881-82 1882-83 1883-84 1884-85 Net Imports of Silver. Rs. 9,000,000 65,000,000 7,000,000 25,000,000 46,000,000 16,000,000 72,000,000 147,000,000 40,000,000 79,000,000 39,000,000 54,000,000 75,000,000 64,000,000 72,000,000 It will be observed that there was a distinct falling-off in the imports of silver between 1870 and 1876, and a subsequent increase, but some explanation is necessary to show the true significance of the figures. During a portion of the time for which the figures of import of silver are given, there was an immense increase in the demand for Indian cotton, arising from causes connected with the American war, payment for which was largely taken in silver. There was also heavy borrowing in England on account of the mutiny and of the extension of public works by the Government in India, which had the efiect of reducing for the time the remittances from India on public account. But taking into our account the 10 years immediately preceding 1874 and those which have followed, it will be found that the average net imports of silver in both periods is, as nearly as possible, the same, viz., about 7^ millions sterling. It may be inferred from this fact that these imports have been larger than they would have been had not the par been broken, if indeed there might not have been an export of silver to Europe. The continued magnitude of the imports of silver into India is in harmony with what has occurred in China, and it presents a marked contrast to the movements of gold in Europe. 12. It must be borne in mind that the withdrawal of inconvertible paper in France and the United States during recent years must necessarily have had a considerable effect in contracting the currenci'es of the world, and that owing to the change in monetary policy to which we have adverted, the demand for metallic money caused by these resumptions of specie payments fell mainly upon gold, instead of falling, as would formerly have been the case, upon both metals. 13. I think, therefore, that the recent changes in the relative value of the precious metals inter se, although probably to some extent due to a diminished demand for silver, are mainly due to an increased demand for gold. I believe it to be impossible to deter- mine in what proportions the two causes have operated. Causes of changes in Gold and Silver prices. 14. But the main practical interest of the question we are examining is derived from the fact that gold and silver are used as standard measures of value, and that any divergence in their relation to each other must be attended by an equal divergence between the things respectively measured by them. The more important part of our inquiry, therefore, relates to the cause or causes of the divergence between gold and silver prices. 15. This divergence may have arisen from either of the two following causes : (a.) A divergence between gold and silver solely due to a Change in their relative value, vnter se. (b.) A simultaneous change affecting commodities, in combination with the former cause. NOTE BY 8IK LOUIS MALLET. Ill For instance, gold and silver may have diverged in value relatively to each other (say) 30 per cent., from a rise in gold and a fall of silver of 15 per cent, respectively. But the corresponding divergence in gold and silver prices may have arisen either from this cause alone, or from a rise or fall in commodities co-extensive with the rise in gold, or the fall in silver, viz., 15 per cent. If due to the first cause alone, gold would have appreciated and silver depreciated, in relation to commodities, 15 per cent., while gold prices would have fallen and silver prices risen 15 per cent. But if due to the second cause, or combination of causes, either gold would not have appreciated, nor gold prices fallen, while silver would have depreciated 30 per cent,, and silver prices risen 15 per cent, from causes affecting silver, and 15 per cent, from causes affecting commodities, or, silver would not have depreciated, nor silver prices risen, while gold would have appreciated 15 per cent, from causes affecting gold, and 15 per cent, from causes affecting commodities. It is therefore necessary, in order, to ascertain the operation of these two sets of causes in the present case, to trace the course of both gold and silver prices di:>ring the period of the divergence. Oold. 16. First, then, as regards gold prices. It might perhaps be sufl&cient to refer to the conclusions of the Hoyal Commission on the Depression of Trade, and to the evidence by which they are supported as to the fall in gold prices in recent years, but an independent examination of the various estimates by competent statists shows that while differing in some important respects, and in the evidence which they afford as to the degree and extent of the fall, there is a remarkable concurrence of testimony that the period under review has been characterised by a marked reduction of gold prices affecting most important commodities, and especially the great staples of whole- sale international trade. Irrespective of these estimates, the statistics of q\iantities and values of the imports and exports of the United Kingdom, published by the Board of Trade, appear to me to place the question beyond the reach of controversy as regards this country, and similar evidence is afforded by the trade accounts of other countries (Finance, Germany, United States of America, and Italy). UNITED STATES. SuMJiARY Table comparing the progress of Imports and Exports as stated in Money in the United States with the progress of Entries and Clearances of Shipping. (Compiled from Tables, p. 177 et seq. of Appendix to First Report of Royal Commission on Trade Depression, continued to date.) 1855-59 1860-64 1865-69 1870-74 1875-79 1880-84 1885-87 (3 years only.) Imports per Head of Population. Amount. £ *. d. 1 17 8 1 14 10 1 18 2 2 18 7 2 2 5 2 15 7 2 11 7 Increase or Decrease on previous Period. Exports per Head oi: Population. Amount. Increase or Decrease on previous Period. Per Cent. - 7-52 + 9-57 + 53-49 - 27-60 + 31-04 - 7-20 £ s. d. 1 13 7 1 7 3 13 7 2 9 11 2 16 3 3 5 11 2 18 Per Cent. - 18-86 - 13-46 + 111-66 + 12-69 + 17-19 - 12-01 Entries and Clearances of Shipping. Tons per Head. Tons. 0-44 0-47 0-40 0-57 0-62 0-68 0-62 Increase or Decrease on previous Period. Per Cent. + 6-82 - 14-89 + 42-50 + 8-77 + 9-68 - 8-82 O 4 112 ROYAL COMMISSION ON GOLD AND SILVER: FRANCE. Summary Table comparing tte progress of Imports and Exports as stated in Money in France with the progress of Entries and Clearances of Shipping. (Compiled from Tables, p. 177 et seq. of Appendix to First Report of Royal Commission on Trade Depression, continued to date.) Imports per Head of Population. Exports per Head of Population. Entries and Clearances of Shipping. Increase Increase Increase Amount. or Decrease on previous Period. Amount. or Decrease on previous Period. Tons per Head. or Decrease on previous Period. £ s. d. Per Cent. £ s. d. Per Cent. Tons. Per Cent. 1855-59 1 18 4 — 2 1 11 — 0-23 — 1860-64 2 9 1 + 28-04 2 11 4 + 22-46 0-26 + 13-04 1865-69 3 2 8 + 27-67 3 2 11 + 22-57 0-33 •t- 26-92 1870-74 3 15 8 + 20-75 3 15 + 19-21 0-41 + 24-24 1875-79 4 6 7 ■ + 14-43 3 14 11 - 0-11 0-52 + 26-83 1880-84 5 1 4 + 17-04 3 13 5 - 2-02 0-69 + 32-69 1885-87 4 6 - 15-13 3 6 10 - 8-97 0-70 + 1-45 (3 years only.) GERMANY. Summary Table comparing the progress of Imports and Exports as stated in Money in Germany with the progress of Entries and Clearances of Shipping. (Compiled from Tables, p. 177 et seq. of Appendix to First Report of Royal Commission on Trade Depression, continued to date.) Imports per Head of Population. Exports per Head of Population. Entries and Clearances of Shipping. Amount. Increase or Decrease on previous Period. Amount. Increase or Decrease on previous Period. Tons per Head. Increase or Decrease on previous Period. 1872-74 £ s. d. 4. 6 3 Per Cent. £ s. d. 2 16 7 Per Cent. Tons. *0-26 Per Cent. (3 years only.) 1875-79 - 4 6 1 + 0-19 3 3 + 11-34 0-27 + 3'85 1880-84 3 8 3 - 20-72 3 8 8 + 8-99 0-32 + 18-52 1885-87 3 3 9 - 6-59 3 3 10 - 7-04 to -35 + 9-37 (3 years only.) • Average for years 1873 and 1874. t Average for two years 1885 and 1886. NOTE BY SIK LOUIS MALLET. 113 ITALY. SuMMABT Table comparing the progress of Imports and Exports as stated in MoNEy in Italy witli the progress of Entries and Clearances of Shipping. (Compiled from Tables, p. 177 et .svg. of Appendix to First Report of 'Royal Commission on Trade Depression, continued to date.) Imports per Head of Population. Exports per Head of Population. Entries and Clearances of Shipping. Amount. Increase or Decrease on previous Period. Amount. Increase or Decrease on previous Period. Tons per Head. Increase or Decrease on previous Period. 1861-62 (2 years only.) £ s. d. 1 10 4 Per Cent. £ s. d. 19 5 Per Cent. Tons. 0-25 Per Cent. 1863-67 1 13 10 + 11-54 1 2 10 + 17-60 0-31 + 21-00 1868-72 - 1 9 1 + 14-04 1 7 3 + 19-34 0-30 - 3-23 1873-77 1 17 1 + 27-51 1 11 6 + 15-60 0-30 — 1878-82 1 13 6 - 9-66 1 10 10 - 2-12 0-33 + 10-30 1883-87 2 + 19-40 1 9 4 - 4-86 0-42 + 27-27 , The following figures from Mr. Grifien's reports to the Board of Trade show that the declared value of our foreign trade in the under-mentioned years was as follows : — The progress of the trade to 1873 having been for many years almost unbroken. 1873 1879 1883 1884 1885 1886 1887 £ 626,000,000 554,500,000 667,000,000 623,000,000 584,000,000 562,500,000 583,500,000 If, however, the trade of the three latter years be valued at the prices of 1873, it would be represented by the following figures : — 1879 1883 - 1884 1885 - 1886 The average for the last four years is — £ 711,000,000 861,000,000 844,000,000 835,000,000 858,000,000 Declared Value. Value at ]?rices of J 873. 609,100,000 849,500,000 showing an average falling ofi^ of 240,400,000Z., or about 29 per cent. Even a more striking proof of the decline in value of British trade, as compared with volume, is afforded by the fact, that while we have seen the total value of that trade declined from 626,000,000/. in 1873, to 583,641,000/. in 1887, the total tonnage employed in carrying it advanced from 37,934,422 in 1873, to 56,170,447 in 1887. A 56136. 114 ROYAL COMMISSION ON GOLD AND SILVER: Wages. I think that further evidence might have been taken with advantage as to the course of wages in this and other countries with a gold standard, but although there has been no general fall in wages corresponding with the fall in prices, the information collected by the Royal Commission on l-Vade Depression, as well as by the present Commission, appears to indicate a reduction in the wages of agricultural labour in many districts, and, although latterly there are indications of improvement due to greater commercial activity, a manifest tendency in recent years towards a decline in other important industries. It is necessary to remark, in reference to this question, that the mere absence of a fall in wages is not of itself sufficient to prove that there has been no appreciation of the standard, as this process may, in certain circumstances, have manifested itself in preventing a rise. In the present case there is no doubt that the course of wages for a considerable period prior to 1873 was in an ascending scale, and that it has suddenly been arrested, if not to any great extent reversed. In an important paper by Mr. Griffen, read before the Statistical Society in 1886, it is shown by ample statistics that the rise in money wages of the working classes in the United Kingdom during the last 50 years had been between 50 and 100 per cent., and that this progressive improvement appeared to culminate about 1873, since which time there has been little increase, and in some cases a decrease, indicating the presence of some cause of a general kind which had counteracted an economic movement due to other causes which were still in full or increased operation. Silver Prices. 17. The evidence as to prices measured in silver is much less complete, owing to the absence of authentic statistics or estimates by competent authorities, but it is never- theless in our opinion sufficient to justify a general conclusion. We have not been able to obtain any evidence pointing to a rise of prices in silver- using countries, and the Commission has been compelled to rely on general statements in the absence of well authenticated and adequate statistics. In most of these the condition of the currency renders the compilation of such statements difficult and of doubtful value ; but I think that the magnitude and importance of British India, combined with the fact of its possessing a sound system of currency based on a metallic standard, may be considered to give it a representative character, and to render it a field of useful, if not of decisive inquiry. I have, therefore, sought in the movements of prices and of the precious metals in that Empire for the means of comparison with the gold prices of the western countries. For this purpose the Colnmission obtained, both from the India Office and from the Government of India, all the available materials for forming an opinion on this subject of Indian prices, and append various tables. The imperfection of these materials is apparent on the surface, from causes which are familiar to all those who are acquainted with the conditions of India, that it is unnecessary to do more than to refer to the explanations given on this head, both in the written and oral evidence. But there can be little doubt that during the years succeeding 1873, there is no evidence of a rise in the general level of prices in India, and that, although there has been in some provinces and districts a rise in the wages of skilled labour, the general wage level, as indicated by the wages of unskilled labour, has not as yet risen. Mr. O'Conor, the Assistant Secretary to the Government of India in the Department of Finance and Commerce, has prepared at our request a statement of Indian price and wage levels from 1861 to 1873, and from 1874 to 1887, from which we gather the following results : — 1. That, on the whole, the food grains of India have for the last seven years been cheaper than in the 14 years immediately preceding them. 2. That the general level (average) of prices for the 14 years from 1874 to 1887 is lower, except for wheat and rice, than in the 13 years from 1861 to 1873. 3. That, in the case of the principal exports, wheat, rice, cotton, linseed, the production of which covers vast areas of land, there has been an increase 'only in rice. Wheat and cotton have fallen, and linseed is nearly stationary. 4. That, of other exports, jute and shellac alone show any marked increase, while saltpetre, silk, and sugar have fallen. NO'XJi BY SIK LOUIS iMALLKT. 115 These general results correspond in the main with the conclusions to be drawn from the returns furnished by the India Office, as well as with the statements of other witnesses ; nor is there any evidence afforded hj the returns of silver coined in India during the years under review which would tend to show that the currency has undergone any abnormal expansion. On the whole, we have been unable to obtain evidence that there has been a rise in the general level of silver prices in India or in other silver-using countries ; on the contrary, it appears to be established that in several important staples of international trade there has been a decline in silver prices. In gold-using countries, where price lists and market quotations are not available with a view of ascertaining silver prices, it is necessary to convert the index numbers of the several tables of gold prices into figures which represent silver prices according to the gold prices of silver on the dates to which those numbers refer. The result of this comparison shows that since 1873 (the date of the abandonment of the fixed ratio by the Latin Union) silver prices have declined as well as gold prices although more slowly, and to a considerably less extent. , 18. I thus arrive at the conclusion that there is evidence of a very marked fall in gold prices in so many commodities as to give it a general character, and that in silver prices whatever change has taken place has rather been in tbe same direction, although to a far less extent. But it is essential to observe that in the foregoing remarks I have confined myself, strictly to a statement of the facts, so far as I have been able to ascertain them, and carefully avoided all reference to the causes of the recent course of prices. T agree, therefore, with those who think that the evidence justifies the conclusion that the period under revision has been one of fallihg prices, and that there is nothing in the facts which is inconsistent with the opinion that to whatever extent thexoo causes may have contributed to the result, there has been aw^fall in gold prices attributabl'i' to the appreciation of the gold standard, nor does the recent partial recovery in the prices of certain commodities and in freights referred to in § 24 of Part II. of the Report at all invalidate this opinion. 19. "We are now in a position to form an opinion as to which of the two sets of causes specified in para. 15 have operated in the present case in creating the divergence between gold and silver prices. If this divergence had been due to the first set of causes solely, viz., to some change in the relative value of the two metals, that change must have taken one of the three following forms : — 1. An appreciation of gold. 2. A depreciation of silver. 3. A combination of both. But in either of the two latter cases, the third factor in price, commodities, having been '" ex-hypothesi " constant, silverprices must have i-isen to the whole extent of the divergence in the first case, and to a part of it in the second of which, as we have seen, there appears to be no evidence. These two explanations are therefore inadmissible, and if the divergence is due to causes affecting the metals alone, it must be due to appreciation of gold. But if it be due to the second set of causes, viz., a combination of changes in one or both of the metals and in commodities, the cause must be either — (a.) A depreciation both of silver and commodities to the full extent of the divergence ; or (b:) A depreciation both of silver and commodities to the extent of a part of the divergence, with an appreciation of gold to the extent of the difference. Either of these hypotheses is consistent with the facts of price given above. We are then left with three possible explanations. One derived from the first, and the others from the second set of causes : — 1. Appreciation of gold, silver and commodities being constant. 2.,; Depreciation of sjlver and commodities in relation to gold, gold remaining constant. ■ 3. Appreciation of ■ gold, and depreciation of silver and commodities in relation to gold. P 2 tf%z^ 1.16 KOYAL COMMISSION ON GOLD AND SILVER: I do not think that the facts before us bear out either of the two first of these explanations, although more consistent with the first than the second. I cannot doubt that cheaper production and transport, combined with other causes which have increased the efficiency of labour, have had some share in the fall of prices during the last 15 years ; but these it must be observed would have affected equally both gold and silver prices, and cannot therefore explain the divergence between them, except on the assumption that silver also has depreciated to the same extent in relation to gold, a contention which will be examined further on. The second explanation requires the belief that the reduction in the yearly supply of gold to countries outside the United States of 16,770,OOOZ. has had no effect on the value of gold in thoee countries, while the addition of 4,558,000/. to the supply of silver has lowered its value by about 28 per cent. ; that gold prices have fallen 28 per cent, from cheapening of production, and that the silver prices of commodities would also have fallen 28 per cent., had it not been for an increased supply and reduced demand for that metal which counteracted this fall ; in other words, that silver prices would have fallen from 100 to 72 if it had not been for the increased supply of silver relatively to the demand, and that the increased supply of silver and reduced demand for it, have exercised an influence on silver prices equivalent to what would be required to raise from 72 to 100 or by 39 per cent., while a more than proportionate increase in the demand for gold, and a more than threefold greater reduction in the supply of that metal has had no effect on gold prices. An elaborate argument will be found in Part II. of the Report, §§ 48-71, in support of this second explanation, in which the divergence between gold and silver is mainly attributed to the depreciation of both silver and commodities. This contention has been so fully dealt with by Mr. Barbour in his Note, whose views I entirely share, that I have little to add. It has been contended that a heavy fall in the gold price of silver may have been caused by the effect of the increased supplies of the last few years operating on a stock diminished by the whole quantity of silver which exists in the form of subsidiary coin in the currencies of Europe and the United States, and which is kept at a gold value by legislation estimated by M. Soetbeer at 361,433,333Z. But this argument appears to lose sight of the effect on the value of silver of the withdrawal from the markets of the world of this large portion of the stock, which is, at present, locked up in the currencies of gold-using countries, and no longer available for export. Independently of this consideration, however, it must be observed, that if silver has depreciated because the increased supply has operated on a diminished stock, it would not have depreciated if this cause had been absent and it had operated on the whole stock. If then, as is assumed, the gold standard has not appreciated since the rupture of the bimetallic par, — and silver would not have depreciated except for that rupture, — the standard of value in the West, which then practically consisted of both metals fused for this purpose into one, would have been unaffected, and the fall of 28 per cent, in the price of commodities from causes directly affecting them as is alleged would have been manifested both in gold and silver prices, i.e., in prices both in Bast and West. But it is impossible with the same metallic stock of gold and silver, and the same quantity of commodities in both cases, that there could be a fall of 28 per cent, in the price of the latter, both when measured against both metals in combination, and when measured against gold alone. Therefore the gold standard must have appreciated in some degree, even according to this 'theory, from causes directly affecting that standard, viz., the recent changes in monetary legislation. The question is not whether gold has appreciated from causes directly affecting gold but whether the standard of value in gold-using countries has appreciated from causes directly affecting the standard. This distinction is important. I also agree with Mr. Barbour in his observations on § 61 of Part II. of the Report, on the effect of an alleged increase in the indebtedness of India to England on current accounts in checking the export of silver to India. In addition to the difficulties enumerated by Mr. Barbour, which must attend all atteaapts to draw up a correct statement of international indebtedness in the case of India, which have hitherto baffled the most experienced accountants, I would observe rhat we can only hope for an approach to accuracy by extending the account over a very long period of time, so as to include all loans contracted in this country. NOTK BY SIR LOUIS MALLKT. 117 Two general principles may, perhaps, be stated : — 1 . That the excess value of the net exports of goods over the net import of specie represents the amount of the home cha.rges, including the interest on debt. 2. That the excess of remittances over the surplus or net export of goods represents the annual increase of capital debt. But if an attempt be made to trace the operation of these principles in any limited period, they will often be found more or less at variance with apparent facts. The remark in § 68 of Part II. as to the effect of the India Council Bills appear to me, for this reason, to overrate their influence on exchange, which can only be temporary in acting as a substitute for silver, and thus preventing its export to India. The Council Bills are merely the mode by which the Grovernment of India pays its obligations in England. If there were no more Council Bills, there would be no remittance in their place, for there would be no more obligations to discharge. The export trade of India would be so much less, and there would be no greater demand for silver than at present. It is a confusion between cause and effect. Another reason for rejecting this explanation is the remarkable coincidence in the fall of the gold prices of silver and of commodities, shown in a separate paper by Mr. Barbour, which is hardly to be reconciled with the belief that it can be due to causes independent of each other, and points rather to a common cause, viz., the appreciation of gold. But unless this explanation be accepted, the argument of §§ 48-71 of Part II. of the Report falls to the ground. It is therefore to the third of these alternatives that I am rather led to look for an explanation of the phenomena under investigation, viz., the proposition that the fall in gold prices is due partly to appreciation of gold, and partly to depreciation /both of silver and commodities relatively to gold. "What proportion of the fall is due to each of these causes I am unable to say, but I strongly incline to the belief that it is due in a far larger measure to the former, than to the latter. My reason for this belief may be shortly stated. I have said that I did not attach much importance to the change which has taken place of late years in the relative supply of gold and silver in producing the divergence of value, and that I attributed this rather to a change in the conditions of demand. From this point of view it seems probable that as the demand for gold for currency practically only arises in countries with a gold standard, while the demand for silver for currency arises both in countries with a gold and in those with a silver standard, the increased demand for gold due to recent monetary legislation would have had a much greater effect on its value than that which any diminished demand for silver, due to those causes, would have had upon the value of the latter metal. To sum up, therefore, my conclusion upon this branch of our inquiry : It appears to follow from the foregoing reasoning that, as between gold and silver " inter se," regarded as standards of value, there has been an appreciation of gold and a depreciation of silver in unascertainable proportions. But that in considering gold and silver in their relation to commodities^ gold being a commodity in countries with a silver standard, and silver being a commodity in countries with a gold standard, and thus using the terms "appreciation" and "depreciation" of the precious metals in their popular sense, there has been an appreciation of gold to the whole extent of the divergence from a combination of causes, and not only no depreciation of silver, but probably a certain " appreciation" of this metal also. The impression left upon my mind by the results of the inquiry is that if the legislative changes made in 1873, and subsequently, had not taken place, there would probably have been some appreciation of the bimetallic standard, i.e., both of gold and of silver, due to causes directly affecting commodities ; but that the effect of those changes has been to diminish the relative demand *for silver, and to increase the demand for gold, both relatively and positively, thus reducing within comparatively narrow limits the appreciation of silver, while seriously aggraviating the appreciation of gold, and leaving the level of silver prices with little alteration, while causing a marked fall in the level of gold prices. Causes other than Appreciation of Gold. 20. Having thus arrived at the conclusion that there has been a distinct appreciation of gold, due in a considerable degree to causes primarily affecting that metal, it is not P 3 118 UOYAL COMMISSION ON HOLD AND SILVEK : necessary to discuss at any length the reasons and arguments which have been advanced to prove that there has been none, but so much prominence has been given to these considerations, both by several witnesses, and in the report of our colleagues, that some remarks are required. This view is sustained by two different lines of reasoning. The one is directed to show that the fall in gold prices, to whatever extent it is admitted, is to be explained by causes directly connected with commodities. The second appeals to the effect of the extension of credit, and of banking and other expedients for economising the use of gold, which it is said have operated in neutralising any tendency to its appreciation. 21. Much stress has been laid on the fall of prices due to what is described as an economic revolution, and a new epoch in the conditions of production, transport, and mechanical and other scientific improvements in manufacture and agriculture, upon the' untrustworthiness of averages between different commodities differing in relative importance, on the absence of retail and local prices in such averages, and perhaps, above all, in the omission of wages from the comparisons. .'In answer to these objections, it is to be said that those undoubted causes of a fall in the prices of many commodities may be at once admitted, without in any way proving that they may not have coincided with and aggravated the effects of an appreciation of gold, and that they are insufficient to account for the fall in the gold price of silver ; also that there is no reason to assume that they commenced to operate in 1873 ; that, in adopting the system of index numbers, its authors were fully alive to its defects, and that, after making every allowance for them, the most careful and thoughtful economists, such as Oairnes and Jevons, both held it to be sufficiently trustworthy to found upon it practical conclusions with every reasonable confidence ; that retail prices will not immediately correspond with wholesale, although ultimately adjusted to them; that wages will probably be the last department which will exhibit signs of reduction, and that we have received much evidence that these have way in important branches of industry. The general airgUinent which is also urged in § 24 of Part II. that there is no evidence of a universal fall, extending to all commodities, all prices, and all wages, and that an appreciation of the standard can only be attested by such a result, scarcely appears to me to call for much remark, as I cannot doubt ■ that the operation of a subtle cause such as this Would, from the nature of the case, be gradual, unequal, irregular, often local, and unattended by any uniform and universal manifestations. 22. Under the first head, I also think that it would be difficult to show that the supply of commodities generally has increased, or the cost of production been diminished, during the last 15 years in a greater degree that in various periods of similar length before that date, when no very general or permanent fall of prices resulted. Those who allow that prices have fallen since 1873, and deny this to have been the effect of an appreciation of gold, must point out something else in the progress of industry since that date entirely different from and even contrary to the progress of the preceding period. If it be said that the gold discoveries in 1850 and the succeeding years counteracted the effect on prices which would have been produced by the increased supply of commodities in those years, this only shows how powerful is the influence of the supply of, and demand for, the precious metals, and justifies those A\'ho contend that the extra demands upon gold, owing to the demonetisation of silver and the rupture of the bimetallic par, have since 1874 intensified the effect of the development of production, and diminution of cost during the latter period. 23. In the next place, I remark that an increase in the supply of commodities involves new demands for the precious metals to be used as currency and reserve, for hoarding, for ornaments, and for use in the arts ; so that not merely may the value of commodities fall in relation to gold, owing to increase of supply, but if the com- modities of which the supply have been increased be of great importance and the number considerable, the value of gold generally may rise owing to the increased demand for it. In no other country have the development of natural resources, the increase in production, and the extension of facilities for transport kept pace since 1873 with the Unite4j States, and it is in this country that the demand for gold has most rapidly increased. NOTE BY SIK LOUIS MALL£T. ; U^ 24. Again, adiuiitiiig au increase of supply at cheaper, cost in certain commodities, and a considerable diminution in the cost of transport since 1874, and as a consequence the fall of the prices of these articles due to these causes, I am of opinion that the ultimate effect should have been to have stimulated the demand for other articles, the price of which would consequently have risen. If so, the fall of prices, which is a marked characteristic of the lalst 15 years, would not have occurred at any rate to so great an extent. 25. And finally, if gold prices have fallen solely owing to causes connected with commodities, silver prices should also have fallen, unless it can be shown that the fall in silver prices has been counteracted by an increased supply and a diminished demand, which is not, I think, borne out by the facts of the case. 26. With respect to the second line of argument, I must begin by stating that I do not share the views expressed in Part II. of the Report, as to the effect of credit upon prices. The question is one of such complexity, and has hitherto been so imperfectly investigated by economists, that it cannot be adequately discussed in connexion with our present inquiry, but I believe the operation of credit to be rather that of adding incalculably to the number of transactions, as well as to the circulating medium required to effect them, than of diminishing the quantity of metallic money necessary to supply the requisite currency. As a matter of fact, I doubt whether, on the whole and in the long run, it has been found that the development of credit has diminished the quantity of metallic money required for currency purposes. I concur in the opinion of Mr. Jevons contained in the following passage : — Investiga- " While the elasticity of credit may certainly give prices a more free flight, the ^^^^^ ^" inflation of credit must be checked by the well-defined boundary of available capital and^fimmce which consists, in the last resort, of the reserve of notes, equivalent to gold in the p. 30. banking department of the Bank of England. Prices may temporarily rise or fall independently of the quantity of gold in the country, ultimately they must be governed by this quantity. ■• Credit gives a certain latitude without rendering prices ultimately independent of gold." And again, p. 176, " It is the aggregate of coin and gold in circulation or reserve, " in short, the supply of gold as compared with the work it has to do, which deter- " mines the range of prices, and which must in the last resort be used to make " payments either in an internal or foreign drain." But without entering further upon this question, it is enough for our present purpose to observe that any extension of credit instruments in the period under review will undoubtedly have taken place rather in the chief gold-using countries than in those with a silver standard, thus tending to sustain prices in the former rather than in the latter, and that it is precisely in the first that prices have fallen, while in the latter they have been comparatively unchanged. If, therefore, these agencies are held to affect prices, it is incontestable that the process which any extension of them would have set in motion would have been that of a fall in the value of gold, or at least an arrestation of a rise, and a relative rise in the gold price of silver, which in countries with a gold standard is a simple com- modity, instead of which the one fact as to which all are agreed is that the gold price of silver has fallen 28 or 30 per cent. 27. The same remarks are applicable to the effect of any economies of gold by banking and other expedients, such as postal orders, the telegraph, and more rapid means of transport, the use of securities, &c., referred to in § 33 of Part II. of the Report, and I must add my opinion that there seems no sufficient reason for supposing that there has been any such marked progress in these economies since 1873, as compared with preceding periods, as to have produced the consequences ascribed to them. 28. I do not think that the influence of credit or of economies in the use of gold since 1873 has any material bearing on the question before us ; and I cannot therefore admit the force of the argument in § 53 of Part 11. 29= In § 36 of that Report a reference is made to what is called the "nexus" between prices and the metal which forms the standard of value. In the remarks which follow, the difficulty of the question appears to me to be complicated by considerations which do not really affect the main issue. P4 120 ROYAL COMMISSION ON GOLD AND SILVER: According to Mr. Mill the price of a thing is its value in money. The "nexus" therefore between money and anything else for which it is exchanged is the same as that between any other two commodities. If the quantity of gold or of iron increases relatively to the quantity of anything else for which it is exchanged, its purchasing power is diminished. If the quantity of gold or of iron decreases relatively to the quantity of anything else v.'ith which it is exchanged, its purchasing power is increased. Whatever may be the effect of what are called " substitutes for gold " as money, the fact remains that an ounce of gold will at one time exchange for more wheat or iron than at another time, and the question which, as I understand it, has been referred for inquiry is whether at the present time, the purchasing power of gold has increased, and, if so, to what caiises such increase is due. 30. Another argument to which much prominence has been given in our inquiry is that if there had been any real appreciation of gold due to scarcity it would be visible in a diminution of the 5ank reserves and in a high rate of discount. I do not believe, and in this view I believe that I am in accordance with most economical authorities, that there is any necessary connexion between the abundance or scarcity of the standard metal and the rate of interest or discount on money. The value of money in the money market and in the produce market are two totally different things. The one is the term used for the use of capital, not of gold, except so far as it is capital, and the demand for capital on loan has no necessary relation to the demand for gold in exchange for commodities. The rate of discount depends on the activity or depression of trade, and as a matter of fact, it will, I believe, be found that when gold has been most abundant, as at the time of the gold discoveries in Australia, the rate of discount was unusually high. During 1854-57 the rate was only for a few months below 5 per cent. ; for more than half a year it stood at 6 and 7 per cent., and at the end of 1857 it remained for nearly two months at 10 per cent. ; again in 1861 it rose to 6 and 8 per cent. On the other hand, in periods of depression, the rate of discount and interest is low, because there is a diminished demand for money on loan, business being restricted and enterprise checked when prices are falling. Table of the Rates of Discount and Gtold Production, showing that although the production was very much smaller between the Years 1844-1852 than between 1853-1863 the average rate of discount was lower. Year. A-verage Rate of Discount. Production. £ s. d. £ 1844 2 10 7,639,000 1845 2 13 8 7,639,000 1846 3 6 6 7,639,000 1847 5 3 6 7,639,000 1848 3 14 5 7,639,000 1849 2 18 7 12,700,000 1850 2 10 1 14,200,000 1851 3 16,600,000 Average 3 12 3 10,211,000 Average of 8 years. 1852 2 3 36,550,000 1853 3 13 10 31,090,000 1854 5 2 3 25,490,000 1855 4 17 10 27,015,000 1856 6 1 2 29,520,000 1857 6 13 3 26,655,000 £ s. d. 1858 3 4 7 24,930,000 8 years' average 4 6 4 1859 2 14 7 4 3 7 24,970,000 23,850,000 28,275,000/. 1860 1861 .5 5 4 22,760,000 1862 2 10 7 21,550,000 1863 4 8 2 21,390,000 Average 4 4 10 26,314,000 12 years' .■ivevimc NOTK BY Silt LOUIS MALLET. 121 Thus the first eight years show a total production 81,686,000Z., average discount 3-6125. The second eight years show a total production 226,220,000Z., average discount 4-3841. Twelve years show a total production 315,770,000L, average discount 4-3437. The term scarcity of gold is a misleading expression. It is not scarcity in the sense of scarcity of bread or meat. It seems to me that if there is less gold, less is wanted for currency, except to sustain prices. This, therefore, does not cause a greater demand for gold which is intended for new production, and not for circulation. On the contrary, when prices fall business contracts, and production is checked — capital in the form of gold accumulates in the banks, and the rate of interest and discount falls. 31. Another theory which has received support from several quarters and which attributes the fall in gold prices to other causes than the appreciation of gold, is that it has been brought about by a fall in the gold price of silver, acting in the first instance upon the prices of commodities exchanged in the trade between gold and silver using countries, and ultimately upon the general level of all prices. This view has been set out at length in §§81 and 82 of Part I. of the Eeport, and in § 9 of Part III. There is no doubt that some colour is given to this theory by the remarkable coincidence between the course of the index numbers of the prices of commodities generally, and the course of the price of silver, but in considering the question it is necessary to distinguish between cause and effiect. If the fall in the gold price of silver was due to the depreciation of silver alone, silver prices would have risen, while gold prices would have at first remained the same. In this case the producer in silver-using countries could not afibrd to take a lower gold price, and his competition would not, therefore, have caused a depression in gold prices. It is because, as I think, this fall in gold prices is largely, if not mainly, due to the appreciation of gold, and because silver is not depreciated in relation to commodities, that the producer in silver-using countries has been enabled to sell his produce at a lower gold price. I, however, think that even upon this assumption it is probable for the reasons given in § 81 of Part I., that the advantages temporarily given to the producer in silver countries have stimulated the exports of certain articles, as for instance, of Indian wheat, and thus tended to increase the supply in gold-using countries, and beat down their price, and that this process may have had an appreciable, although a limited, effect in aggravating the fall of gold prices. This cause, however, to whatever extent it has operated, I regard rather as collateral and contributory than as primary in its effect on gold prices. 32. Having thus examined the different causes of the divergence in value between gold and silver, and their respective effects upon gold and silver prices, I add some remarks as to their bearing upon the matters of practical business to which attention is directed. India : (a.) Remittances of Government. 1. For old and fixed contracts. 2. For new and current contracts. The very serious nature and extent of the effects of the divergence upon these remittances are shown at some length in §§ 94 to 100 of Part I., and I need not therefore repeat them. 33. But I cannot express too strongly my sense of the injurious, not to say disastrous, effect of the absence of a common standard between this country and its greatest dependency It is not too much to say that it renders all continuity of financial policy impossible in a country in which successful government especially depends upon finance, and in which the financial diflBculties of the future are grave enough, without this additional source of unnecessary and lamentable weakness. A 56136. Q 122 ROYAL. COMMISSION ON GOLD AND SILVER: Private Bemittances. 34. Persons in India who have to make remittances home in gold have suffered in the same manner and to the same extent as the Government. Their remittances, when converted into gold, undergo at the present time an apparent loss of about 33 per cent., except when this is alleviated by a fall in the gold prices of the articles or services in payment of which the remittance is made. The private remittances, as a whole, comprise not only the savings of Europeans resident in India, both in the service of Government and in other capacities, but the dividends upon Indian investments due to residents in England, and remittances by banks and merchants in the course of commercial transactions. It is not possible to ascertain their total amount, but when it is considered that most of the joint stock enterprises, such as railways and many agricultural and manufacturing undertakings, have been created by British capital, it is evident that a large part of their profits must be remitted to England, and that these must suffer heavily by the fall in the exchange. There is, however, this distinction to be noted between the remittances of Govern- ment to defray fixed charges, and those of private persons who remit their savings or profits. In the case of the first, an additional number of rupees is required to discharge a fixed sterling obligation. In the second case the same number of rupees is remitted, with a smaller outturn in sterling. The effect, therefore, of the first is to increase the exports from India, while no such consequence attends the second. On Producers, Merchants, and' Taxpayers of India. 35. Before I proceed to deal with the respective interests of these several classes* it may be convenient to state my views with regard to the general effect produced upon the international trade between a gold and a silver using country by changes in the relative value of the two metals. Such changes, as I have already pointed out, must be attended or followed by proportionate changes in the levels of gold and silver prices. But while any change in the relative value of the two metals will take effect simultaneously in both countries, the adjustment of all prices, including the wages of labour, to the altered relation is necessarily not only gradual and unequal, but in regard to existing contracts, the wages of labour, and all payments regulated by custom, often so slow and doubtful in its operation as greatly to affect the relative conditions of production in the tw;o countries. While the adjustment is pro- ceeding, the producers in one country may possess a distinct advantage over those in the other, from the fact that prices may have fallen in the first and not in the second, while fixed charges such as rent, interest on loans, and wages remain for a considerable time unaltered. "When the process of adjustment has been completed, and all prices, including wages and fixed charges, have accommodated themselves to the altered relation of the standards, the conditions of exchange between the two countries will, so far as this cause alone is concerned, be the same as before. I cannot help thinking that the widely ' prevalent opinion that the divergence in value between gold and silver has operated as a stimulus to exports from India and other silver-using countries, is largely due to the impression which existed in the earlier period of that divergence, and which was strengthened by the Report of the Silver Committee of 1876, that it had been caused by a depreciation of silver as a standard of value against commodities. If this had been the case, we should have expected a marked flow of silver to India in preference to ■ other commodities, and a temporary increase of exports from India, thus causing a stimulus to Indian exports and a check to the import trade in goods until an equilibrium had been reached. But no such effects need be produced by a divergence due to the appreciation of gold, which, as will have been seen by my previous remarks, has been, as I think, the principal cause of the recent disturbance. From this latter point of view, the process which has been in operation would appear to have been of the following nature, confining our attention, by way of illus- tration, to the trade between India and the United Kingdom for the sake of greater clearness. The appreciation of gold has caused a fall in the price of commodities in general, including silver, in the United Kingdom as a gold-using country. The absence of depreciation of silver in India has left prices in that country generally stationary. NOTE BY SIR LOUIS MALLET. 123 Tte English producer being unable at once to adjust Ms fixed charges and wages to the fall in the price of bis product, has been compelled to forego a part of his profit. The Indian producer having escaped a fall in the price of his product, has remained unaffected by the monetary disturbance, and has thus and to this extent been placed at an advantage as compared with the English producer. Both English and Indian producers have had to submit to a lower gold price in the English market, but as this lower gold price produces the same number of rupees as the higher gold price did before, the Indian producer has not suffered, while the English producer from the cause mentioned above has undergone a loss of profit. If this loss were caused by any special disadvantage of the Indian trade it would, no doubt, have led to a contraction of the exports to that country, but as it is equally incurred in other branches of trade, the effect has probably been to stimulate them with a view of counteracting the loss by larger sales. The general principles which in the long run control and determine the course of trade on the occurrence of a divergence in the value of the two metals between countries with a gold and with a silver standard appear to be these, and to be in accordance with what would seem to have been the facts in the present case. The divergence in value of gold and silver must be attended or followed by a proportionate divergence in gold and silver prices "When this process, which must be gradual and unequal in its operation, has been completed, and all prices, including wages and fixed charges, have adjusted themselves to the altered level, the conditions of exchange between gold and silver using countries will, so far as this cause alone is concerned, be the same as they were before. But during the process of adjustment, which may extend over many years, and cause infinite evil, a considerable disturbance in those conditions will probably take place, from the very nature of the process. In what does this process consist ? It must consist in a rise of prices in one country and a fall of prices in the other, or a rise or fall in different degrees in both, but in all cases the relative effects will greatly depend upon the extent of the divergence. It seems, however, probable that those effects will be more marked in a case characterised by appreciation of the standard in one country and by depreciation of the other than where t;he movement of prices in both countries is in the same direction although in different degrees. In the former case, it appears to me that the real exchange between two countries trading with each other must be affected by whatever affects their relative conditions of production, and it must be admitted, I think, that whatever may be held to be the effect on a country as a whole of an appreciating or a depreciating standard, as regards the producing classes at all events, a country in which prices are rising or are stationary is at an advantage in its relation to a country in which they are falling, owing to the fact already stated that a considerable time must necessarily elapse before the fixed charges and the wages of labour can adjust themselves to the lower scale. This process of adjustment, when it takes place on a descending scale, is one of infinite loss and difficulty to all those who are affected by it, and we attribute much of the depression of trade and diminished employment of labour and profits on capital to the operation of this cause. 36. Applying these general principles to the case of India, it seems probable that if the fall in the exchange had stimulated the export trade and thus benefited the Indian producer, the same cause would have checked the import trade ; but the trade accounts for the period under review show that, while there has been a great growth in the foreign trade of India, as a whole, the progress of the import trade has kept pace with that of the export trade. This remark applies both to the total foreign trade of India, and to that part of it between India and this country. The statistics of the trade are given in the Appendix to our first report. Tables B. andC, p. 338. These facts are scarcely consistent with the opinion that the Indian producer has greatly benefited by the fall in the exchange, but a still stronger reason for the conclusion that no marked effect upon the Indian producer has been felt is afforded by the fact, which appears to be unquestionably established by the tenor of the evidence, that there has been no such general rise in the prices of the staple products of India as to afford ground for thinking that there has been any special cause at work tending to an abnormal increase of production. I am not, therefore, disposed to think that the divergence in value of the precious metals has, down to the present time, affected in any marked degree the general Q 2 124 EOYAL COMMISSION ON GOLD AND SILA'EK : condition of the Indian producers as a class, although there is much evidence to show, what probably has been the case, that, at particular moments, a fall in the exchange has led to an increased demand for special products such as wheat, and temporarily acted as a bounty upon its export, until the fall in the gold prices of such wheat in Europe has restored the trade to its former level. This effect, therefore, is rather due to the progressive nature of the divergence, than to the fact of such divergence once for all. 36. I am, however, far from thinking that the absence of a common standard of value between the United Kingdom and India, and the frequent fluctuations which are inseparable from the present absence of fixity in the ratio between the metals of which they consist, are unattended by evil effects in the long run even to the producers and merchants of India. However, it may be true that, in the long run, any change in the relative value of gold and silver may be followed by corresponding changes in the prices of commodities and the wages of labour, it is notorious that the two things are not identical in point of time, and that, with respect to contracts and obligations which are either permanent or which extend over many years, the adjustment is either impossible or slow and gradual in its operation, so as greatly to affect the relative conditions of production between the two countries. In the present case we have received evidence that, although it may be true that the fall of gold prices has been followed and neutralised by a corresponding fall in the prices of Indian products in Europe, still that, owing to the fact that the Indian producer has not been affected by any change in the standard of value, while the producer in Europe has been obliged in many cases to accept lower prices, with no corresponding fall as yet in the fixed charges to which he may be liable, the former has been placed in a relatively better position, and been able to compete under more favourable conditions than before. To this extent I am therefore disposed to think that the Indian pro- ducer may have benefited by the fall in exchange, and that in this sense he may be said to have received a bonus or bounty on the exportation of his products ; but I am unable to accept the view which has been pressed upon us by many witnesses that the fall in exchange can operate permanently as a bounty on Indian exports, holding as I do the opinion that this fall is mainly due to an appreciation of gold which must in course of time equally affect the gold prices of the main articles of Indian export and import. Nor can I doubt that the Indian producer is distinctly injured by the unstable nature of the exchange between gold and silver using countries, which cannot fail to render the conditions of production, so far as regards the staple exports, more or less uncertain and insecure, as well as by the unquestionable check which is thus caused to the investment of British capital in industrial undertakings. I believe that the present high rate of interest on money in India in first-class securities, such as mortgages on solid and improving property, is largely due to this unstable condition of the exchange, which necessarily deters Western capitalists from such investments, and that India is thus deprived of one of the great advantages of British rule in providing her with cheaper capital and improved credit. 37. On the other hand, the apparent stimulus which has been given to the trade of India in some branches (especially to the cotton trade) v^-ith silver-using countries appears to afford a useful illustration of the disturbance which may be caused by the unsettled exchange, as it seems to show that a stable exchange may. account for the partial transfer of a trade from a country where this condition is absent, to one in which it exists. 38. If this be the case, it appears probable that the continuance of an unstable exchange will tend to operate very unfavourably on the progress of British trade with the East .and with silver-using countries generally, and it must be borne in mind that nearly two thirds of the British export trade in cotton manufactures, both yarn and piece-goods, is carried on with these countries, on which, owing to the protective tariffs of most of the gold-using countries, the British manufacturer has been compelled niore and more to rely. We cannot, therefore, but regard this aspect of the question under consideration as of great prospective interest. 39. I have nothing to add to the remarks in Part III., § 16, on the position of the Indian taxpayer, except to observe that in considering the future I cannot but regard as a matter of serious moment the possibility of a still further relative depreciation NOTE BY SIR LOUIS MALLET. 1-5 of silver or appreciation of gold. This possibility is indeed so present to the minds of many of those whose opinion is entitled to much consideration, that it has been urged as one of the principal objections to the adoption of rated bimetallism, from the fear that the excessive production of silver would drive all the gold out of the currencies of the countries which adopted it. It seems, therefore, necessary to take it into account in considering the practical policy to be pursued. Effects on United Kingdom. 40. But it is upon the general trade of the United Kingdom, and the industrial condition of this country generally, that I think the injurious effects of the recent currency changes have been chiefly felt. 41. I observe the following paragraph in the Final Report of the Royal Commission on the Depression of Trade and Industry. " We expressed in our third report the opinion that this fall in prices, so far as it had been caused by an appreciation of the standard of value, was a matter deserving of the most serious independent inquiry ; and we do not, therefore, think it neces- sary to investigate at length the causes which have brought it about. But we desire to give it a leading place in the enumeration of the influences which have tended to produce the present depression." 42. The result of this inquiry has been to produce upon my mind a similar impres- sion, and if the conclusion at which I have arrived, as to the nature of the divergence in the relative value of the two metals be correct, the effect upon the trade and industry of the United Kingdom must have been that of an appreciating standard of value. I hold, for reasons which are given at greater length in § 85 of Part I., that this is a distinct and serious evil, especially to the industrial and working classes. Absolute stability in the standard of value being unattainable, it is, in my opinion, better in the interests of those classes, and probably in the general interests of society, that the tendency should be rather towards depreciation than appreciation. Whatever the drawbacks and inconveniences of this former process, and they are far from inconsiderable, it at least tends to benefit the commercial and industrial classes and the general taxpayer, rather than the unproductive classes, and to improve the condition of the great body of the people. The contrary effect is produced by appreciation ; in this case, those who are enjoying acquired wealth benefit at the expense of those who are in process of acquiring it, and the active and enterprising members of society suffer. If the relation of debtor and creditor must be disturbed, it is in the interest of trade and industry that the change should be favourable to the debtor rather than to the creditor. 43. The appreciation of the standard of value, so far as it is due to causes affecting the metal or metals of which it is composed, has been, in my opinion, primarily caused by the rupture of the bimetallic par. If this had been maintained there might still have been, if my view is correct, a fall in prices due to causes affecting commodities, but the effects of such a disturbance would have been very different ; they would have affected debtors relatively rather than positively, while they would have left the tax- payer in no worse a position than before, although benefiting the annuitant. 44. In the foregoing remarks I have dwelt more especially upon the evil effects which have been caused by the particular and accidental form which the divergence between gold and silver prices during recent years has assumed, viz., that of an appreciation of the gold standard, and a corresponding fall of gold prices ; but in placing on record my view as to the general and permanent evils arising from the absence of a fixed legal ratio between the two metals, I desire to express very distinctly the opinion that I attach far more importance to the injurious effects of constant fluctuations in their relative value, in imparting a character of uncertainty and insecurity to the international exchanges between gold and silver using countries, than to a mere alteration in their relation to each other, in one form or other, whether by a rise or fall of either metal. It is necessary to give prominence to this view, because it is sometimes said that a bimetallic standard is advocated mainly . for the purpose of raising prices and benefiting debtors. It is entirely forgotten by Q 3 126 ROYAL COMMISSION ON GOLD AND SILVER: those who entertain this idea, that if the divergence in the relative value of the two metals had taken the form of a depreciation of silver, the adoption of rated bimeta,llism would have the efiect of lowering prices and benefiting creditors in countries with a gold standard. It is moreover essential to remember that this aspect of the question is not affected by the difference of opinion in the Commission, as to the secondary causes of this present divergence. 45. I therefore find that the effects of the divergence have been distinctly injurious, and that the original cause has been the change in monetary legislation in the years immediately preceding and following 1873. The present divorce of gold and silver is is nothing more nor less than a great and novel experiment. To speak of a return to a system which practically prevailed for nearly two hundred years as a " tremendous change " and a " leap in the dark," as it is described in §120 of Part II., appears to me to be a great exaggeration. Unless we go back to a period which affords no ground for useful comparison, we have nothing but the experience of the last 15 years to guide us in forming an opinion as to what the consequences may be, of substituting what has been called " unrated ' for " rated " bimetallism in " the world's " currency. So far, that experience is far from encouraging. Serious inconveniences in international trade have manifested themselves, prices have been greatly disturbed, and no present prospect appears of an abatement of these evils. 46. But it is chiefly to the future that those who view with anxiety the present monetary disorder look with apprehension. For the future there is, and can be, no security whatever. Any large addition to the stock of either metal, or any large deficiency in its supply, any change of policy in any important country, dictated by real or supposed national interest, such as the adoption of a gold standard by India, a further divergence in the ratio, rendering illicit coinage of silver in countries where it is kept at an artificial value profitable, might produce serious embarrassment, and in India a political and financial crisis. It may be safely affirmed that no country in the world can be secure or satisfied with the present state of things. It is neither monometallic nor bimetallic in the popular sense of the term, and can only be properly described by the French term, as the system of the 4talon boiteux. I concur in the opinion expressed at the Monetary Conference in Paris, in 1878, by the British delegates, that a further demonetization of silver, which may be the result of inaction, might bring about a commercial and financial catastrophe. If then there can ever be a case which calls for international concert, this certainly appears to be one. Future Supplies. 47. Some reference is necessary to the question of the prospect of the future supplies of gold and silver. I should have been glad if it had been found possible to receive more evidence on this head, but I doubt whether any very useful purpose would have been served by it. As regards the conditions of future production (and on this point there seems to be a very general concurrence of opinion) it seems probable that while there will be a continuous supply of both metals in fluctuating quantity, there is little prospect of any such vast and rapid increase in the supply of either of them as has taken place on former occasions, and especially at the period of the Californian and Australian gold discoveries, but it appears to me that any opinion on this subject must be so speculative in its character, that it would be unsafe to give an important place to this element in the problem, in deciding on the practical measures which it is advisable to adopt. Proposed Remedies. 48. With regard to the possible remedies for the serious evils which, in my opinion, have been caused, and will continue to be caused, by recent changes in the relative values of the precious metals, I have little to add to the recommendations of the joint report. 49. Convinced as I am that the primary cause of those changes has been the final rupture of the bimetallic par maintained by the Latin Union until 1873, I cannot NOTE BY SIR LOUIS MALLET. 127 doubt that a remedy should be sought in a return to the system of a fixed ratio between gold and silver, if it be possible to establish it over a sufficiently wide area to ensure permanent stability. 50. What the extent of the area sufficient for such a purpose would be is a question on which very diiferent opinions prevail, but I should hesitate to recommend any course which would conduct Her Majesty's Government to the adoption of a bimetallic standard in the United Kingdgm which did not include the principal commercial countries and groups of countries of the world, such as the United States of America, the Latin Union, the German Empire, the United Kingdom, and British India. 51. I believe, however, that if an agreement could be arrived at between these Powers by which their mints were respectively open at all times to the free coinage of both metals into legal tender money at a common fixed ratio, such coins being available for the payment of all debts at the option of the debtor, all future fluctuations in their relative value would be confined within very narrow limits, and that a common international standard would be secured, possessed of the greatest attainable degree of stability. 52. This is, however, a remedy the application of which is only possible by inter- national concert, and I have no means of knowing what prospect there may be at the present time of the co-operation of the Powers concerned for such a purpose. 53. I can only observe that on the occasion of the Monetary Conference of 1881 at Paris, it appeared probable that if the assent of Her Majesty's Government could have been obtained, such an arrangement as I have suggested would have been acceptable to the other Powers. I therefore think, that if any future occasion should present itself which appears favourable to renewed negotiations with a view to another conference with a similar object, it is one which Her Majesty's Government should do all in their power to promote. It would be useless to enter upon a consideration of the details of any such arrange- ment, in anticipation of discussions which can only possess practical value in connexion with an international conference. The questions involved are of a kind which afiect so many interests in other countries as well as in the British Empire, that the materials are not available for definite and final conclusions as to the precise nature of any arrangement, except as regards the essential principles to which I have already adverted. 54. But on one point it is necessary, in anticipation of any international negotiations, to state the views which I have been led to entertain, viz., the permanent relation which it is desirable to create between the two metals, in the event of the adoption of a fixed ratio under international sanction. 55. I so far difibr from the opinion of some of my colleagues, as to think that the expediency of establishing such a ratio should not be held to depend upon the possibility of its being fixed at the average market ratio of the last two or three years. I think that any ratio, within the extreme limits of that which prevailed prior to 1873 and that of the present time, would be preferable to none. 56. And while I am far from underrating the objections to an arbitrary interference with prices and existing contracts by the creation of a ratio widely differing from the market ratio, I doubt whether the consequences would afiect existing interests so seriously as is sometimes thought, if the change of standard were gradual and prospective, and not immediate, in its operation. 57. I also think that in considering the objections to the action of Government in disturbing the standard of value, there is something to be said against the adoption of a ratio which might prevent any natural recovery from the present depression of gold prices, and render permanent in the case of India, the present heavy loss on the Government remittances which has been caused by the recent divergence. 58. "Whether on the balance the general interests of India would be better served by a return to the former ratio, or by the adoption of one appi'oximating to the market ratio, is a question on which different opinions are held by those entitled to Q4 .128 KOYAL COMMISSION ON GOLD AND SILVKR : speak with authority, and whicli involves so many considerations, both political and economical, that I think it should be left in a great degree to the decision of the Government of India. 59. I would, however, observe that while, on the one hand, it is possible that a return to the former ratio might, by causing an increased demand for silver in Europe, check its flow to India, and thereby tend to lower prices in that Empire, it is difficult to believe that the opening of the Indian mints to gold would not have an effect in attracting into the currency a portion of the gold which exists in such large quantities in India in hoards, the accumulation of which has probably increased under recent conditions, and which a fall in the value of gold would probably have a tendency to diminish. 60. But I think that this is a question which can only be determined by a con- ference, at which the interests of other countries, as well as those of the British Empire, can be fully represented and considered, and, therefore, that, if such a conference were at any time to be held, Her Majesty's Government should enter it, unfettered by any previous expression of opinion on this important point. Objections. 61. In addition to the objections to this policy which have been enumerated in our joint report I would add the following : — (rt.) That a bimetallic ratio would probably give a worse rather than a better standard of value, because the momentary standard is always the over-estimated metal, which would give a constant advantage to the debtor, and that silver has during the last thousand years fallen more than gold, and that while both have depreciated in com- parison with corn and the chief raw materials, it is probable that silver is more subject to depreciation than gold. The ratio would, therefore, tend to discourage the production of the dearer metal, which it is desira.ble to encourage. With respect to this objection I would observe that it in no way follows from the fact that the momentary standard is the over-estimated metal under a bimetallic system, that a worse rather than a better standard of value would be secured. This will entirely depend on the cause of the divergence between the two rated metals. If that cause be the depreciation of one of them in comparison with things in general, the effect will be as is supposed, but if the cause be the appreciation of one of them as against things in general, the over-estimated metal will be the better standard of the two. Nothing is more impossible than to predict with confidence what the future relations of the two metals if they remain unrated may be, but at the present time, if the conclusions at which we have arrived in this Report are sound, it is evident that silver has varied considerably less than gold in its relation to commodities. Although it may be true that during the last thousand years both metals have fallen in value in comparison with corn and raw materials, this has not been the case as regards gold since the early part of the present century, a period which serves far better for practical purposes of speculation. It appears to me, in view of the enormous expansion of trade and commercial transactions in modern times, and the increased efficiency given to human labour by improved methods of production and transport, that it is only by the full and free utilisation of both metals as standards of value that a progressive tendency to appreciation, and therefore to instability, can be averted. (b.) The objection, that in the event of a great war in which any one of the con- tracting powers were engaged, it might probably be necessary for it to resort to a forced paper currency. In such a case I see no reason to suppose that one metal more than the other would be thrown on the markets of the world, thus disturbing the ratio, or that any other effect would be produced, which would not equally follow a similar policy, if there were no convention, viz., a temporary addition to the currency of the world, attended by an inflation of prices, which, when specie payments were resumed, would be followed by a collapse. This is no doubt an evil, but it appears to me to be one the effects of which, would be more serious if one metal alone was the general standard of value. It must also be remembered that the present unsettled relations between gold and silver constitute one of the main difficulties in the resumption of specie NOTE BY SIR LOUIS MALLET. 129 payments, and the adoption of a metallic currency by countries, such as Eussia, Austria, and several South American States, in which the system of a forced paper currency still prevails, and that its continuance may compel them at some future time to resume on gold. (c.) The answer to the objection derived from an alleged breach of faith with creditors, must mainly depend upon the view which is taken of the magnitude of the evils which have already arisen, and may reasonably be expected to arise in future from the absence of any legal ratio between the two metals. If these evils are inconsiderable, and can be regarded without serious apprehension for the future, it may well be thought that they do not justify measures which arbitrarily affect the standard of value, and may disturb existing contracts". But a different set of considerations arise if, as I have stated them in my belief to be, they are of a nature seriously tq impair the general interests of the country, to compromise our commercial policy, and to imperil the financial position of our greatest dependency. From this point of view it will probably be admitted that, as in other cases of national emergency, the interests of a portion of the community, however important, should not be allowed to stand in the way of a reform which is thought to be required in the interests of the Empire as a whole. 62. I fully appreciate the reasons which have weighed with those of my colleagues who are opposed to so great a change as that which has been suggested, on what have appeared to them doubtful and insufficient grounds, and it is with much hesitation that I venture to differ from the opinions of some of them, such as Sir J. Lubbock and Mr. Birch, whose practical experience and authority are much greater than mine, but after giving due consideration to all the objections which have been urged against it, I do not think that they are such as ought to be allowed to stand in the way of the course which has been recommended in §§ 34, 35 of Part III., even on purely national grounds, even if the question were not one of much wider significance. 63. A common standard of value between the principal commercial countries is an object the importance of which can hardly be exaggerated, and it appears to me to be almost an essential condition of the fulfilment of the policy of free trade. 64. If this opinion be accepted, it may be safely affirmed that, in the present state of the world, the object in view can only be attained by the method which has been proposed, and I cannot doubt that if a sufficiently wide area of agreement between the leading commercial countries could be secured, this great international reform might be successfully accomplished. 65. To sum up the preceding remarks : — (a.) The primary cause of the divergence in the relative value of gold and silver in recent years is to be found in the monetary legislation of the period, by which the regulating effect of law in maintaining practical stability in theii- relation to each other was removed. (b.) The forces set free by the withdrawal of this influence have operated in largely increasing the demand for gold, and in diminishing to some extent the demand for silver, thus causing a distinct appreciation of the former, and a certain depreciation of the latter, considered in their relations " inter se." (c.) These effects have been increased by a diminished production of gold, and an increased production of silver. (d.) Concurrently with these changes there has been a large addition to the supply of important commodities due to the increased efficiency of labour, both in production and transport, thus causing a reduction in their prices, (e.) The joint result of those several causes has been a considerable appreciation of gold, causing a marked fall in gold prices and some appreciation of silver, although apparently not' enough to produce any distinct effect on the general level of silver prices in countries with a silver standard. (/.) The inference to be drawn from these conclusions appears to be that the diver- gence is due far more to the appreciation of gold from monetary causes, than to the depreciation of silver and of commodities from other causes affecting them both in equal degree. A 56136. E 130 ROYAL COMMISSION ON GOLD AND SILVER : {(J.) I'Jie effects of the divergence have been injurious : — (i.) From an appreciation of the gold standard. (ii.) But far more from instability of exchange between gold and silver using countries, and especially between the United Kingdom and India. (L) The remedy for these evils is to be sought in the adoption, if possible, of the free coinage of both metals into legal tender money at a fixed ratio between them, over a sufficient international area, for the following reasons : — (k.) A single standard of value is admitted to be of so much importance that in all civilized countries it is always adopted as a basis of national exchange and contracts. (l.) Such a standard can only be less important in international transactions because they are less numerous, and the inconveniences of different standards of value are less intolerable ; but it is not denied that they exist, and that as the foreign trade of commercial countries assumes year by year larger proportions, so do the evils of different standards of value year by year increase in magnitude. (m.) But it is impossible to create a common standard of value in the international transactions of countries which now use gold and silver respectively as a standard, if such common standard is to consist of one metal only, neither gold nor silver existing in sufficient quantity for such a purpose, without causing such a disturbance in prices as would amount to a commercial and financial revolution. (n.) Therefore, it is only by the full utilisation of both metals through the adoption of free coinage into legal tender money of both, with a fixed ratio botween them within a sufficient international area, that this result is attainable. (o.) It only remains to consider whether it is better, both metals being indispensable for the purposes of the world's currency, that they should be rated or unrated. If they are rated a single standard of value may, it is held, be secured for national and inter- national exchanges. If they remain unrated they will continue to be liable to constant variations in relative value, and all the evils of two different standards of value in the trade of the world, and even within the limits of the British Empire itself, will still be allowed to hamper and restrict commercial progress. (j9.) It is thought that of these two alternative courses, the first is preferable, but as it can only be rendered successful by the concerted action of the principal com- mercial powers, no opinion is expressed as to the possibility of its adoption. Louis Mallet. NOTE BY MR. BABBOUR. 131 Note by Mr. Barbour, Grounds of Dissent from Part II. I regret that I have been unable to sign Part II. of the Keport. The following are the reasons which prevent me from doing so : — The method adopted for deciding whether the change in the relative value of the precious metals in recent years is due to appreciation' of gold or depreciation of silver is not satisfactory, especially as gold prices and silver prices are not dealt with in the same way. Sufficient importance is not attached to the dangers and difficulties of the future if the hope of establishing comparative stability of relative value between the precious metals be finally abandoned. Too great weight is attached to the risks and difficulties attending the establishment of the full legal tender of both gold and silver in this country. The remedies, or palliatives, proposed are, in themselves, insufficient to secure a satisfactory settlement of the question. Although I concur in the conclusions arrived at, and remedies proposed in Part III., it appears to me , that the subject might with advantage have been treated in a somewhat different way, and some of* the arguments and objections set forth at greater length. I have therefore decided, after much hesitation, to add the following remarks on my own behalf. What is meant by " Appreciation of Gold " and " Depreciation of Silver." 2. The terms of the order appointing the Commission may be said, briefly, to require us to examine — 1. Whether the changes in the relative values of the precious metals are due to appreciation of gold or depreciation of silver. 2. Whether these changes are causing permanent and important evils. 3. Whether these evils (if they exist) can be remedied by measures which would not give rise to other evils equally great. The first question that arises on this reference is what meaning should be attached to the expressions " appreciation of gold " and " depreciation of silver " ? 3. Strictly speaking, "appreciation of gold." means an increase" in the value of gold, Value ex- but value expresses a relation, and gold cannnot increase in value ex(;ept in relation to pi'esses a some other thing for which it is, or can be, exchanged. The phrase " appreciation of ''^^'**''"^- gold," when not used with special reference to an article, or a group of articles, for J^*^"^^^®^ ^° which gold is exchanged, can only mean a rise in the general purchasing power of o-dd mean- gold, or, in other words, a rise in the average purchasing power of gold in reference ingless, to things in general. except with No method has been devised whereby the average purchasing power of gold, in this '"^^^^^nce to very wide sense, can be determined with accuracy. which o-old If the gold price of every commodity, and of every kind of labour, had fallen is, or may be, in all parts of the world, there could be no question but that there had been an exchanged. " appreciation of gold." On the other hand, if the silver prices of all commodities, and of every kind of labour, had risen, we might safely say that there had been a depreciation of silver. But the facts are not so simple ; the gold prices of all com- Impossibility modities and services have not fallen ; the silver prices of all commodities and °/ measurmg services have not risen. The task of combining the average "prices of all commo- inereasTor^ dities and of every kind of labour, in all parts of the world, and of allowing for decrease in variations in the quality and quantity of each article, and of efficiency in every kind *^^e value of of labour, in suc^ manner as to accurately measure appreciation or depreciation in ^°l^ ^'"^ the sense just referred to, is one which has not been, and probably never can be, eveiTthiiio-? successfully accomplished. 4. Eesults of a more or less useful character might be obtained by arranging commodities and different kinds of labour in groups, obtaining an approximate state- ment of the change in the purchasing power of gold in relation to each group, and drawing a general conclusion from a consideration of the aggregate of these state- ments. But, unfortunately, an invidious meaning is generally attached to the terms " appreciation " and " depreciation " when used in relation to the standard of value, and inquirers do not always approach the question of the appreciation of gold or depreciation of silver with impartial minds. An excessive issue of inconvertible paper R 2 132 ROYAL COMMISSION ON GOLD AND SILVER I Invidious meaning attached to the terms " apprecia- tion "or "de- preciation " of the standard of value. Complication due to attempt to divide causes affecting the value of gold into causes primarily aflPecting gold and causes primarily affecting commodities. money is always attended with, a fall in the value of such, money below its nominal value in gold. It is then said to be "depreciated," and the statement is accurate so long as it is understood to mean that the nominal value of the paper money is greater than its actual gold value in tbe market. All the evils which generally attend the over-issue of inconvertible paper become attached in the public mind, by a natural process, to tte phrase " depreciation " of tbe standard, and " appreciation " is held to indicate evils of an opposite nature, but equally grave in character. As a consequence of this state of feeling the advocates of any standard of value instinctively feel that their case is materially prejudiced in public opinion if they admit that that standard has either appreciated or depreciated, though it is quite certain that every standard must, as a rule, be either appreciating or depreciating in some degree. 5. A further complication has been introduced into the question by a proposal to limit the meaning of the phrase ■' appreciation of gold " to a rise in the value of gold due primarily to causes affecting gold. I venture to think, with all deference to those who hold the opposite opinion, that the distinction attempted to be drawn is radically unsound, and that any attempt to apply it in practice would only produce error and confusion. It is impossible to separate the causes producing an alteration in the relative value of gold and commodities into causes primarily affecting gold and causes primarily affecting commodities. A great increase in 'the production of commodities means a great increase in wealth, and would ordinarily be attended with an increase of demand for gold. The prices of some commodities would fall because they were produced in increasing quantities ; the prices of commodities generally would tend to fall because there was an increased demand for gold, and there are no means of saying how much of the alteration in price in the case of any commodity is due to increased production and how much to increased demand for gold. If, as has just been shown, it is impossible to determine with accuracy the increase in the general purchasing power of gold, a fortiori, it is impossible to determine what portion of such increase is due to causes primarily affecting gold. Possibility of avoiding altogether the use of the terms " apprecia- tion " and " deprecia- tion " of the standard. Expediency of avoiding the use of the terms "Appreciation of Gold" and " Depreciation of Silver." 6. Looking, then, to the invidious meaning attached to the terms " appreciation " and " depreciation," -as applied to the standard of value, to the impossibility of measur- ing with precision the change in the purchasing power of the standard, and to the opening for endless controversy which is afforded by any attempt to do so, it appears desirable to avoid, as far as possible, the use of the terms " appreciation " and " depreciation." An examination of the prder of reference to the Commission wiU show that the practical issues involved do not necessarily require a precise apportionment of the extent to which either gold or silver may have appreciated or depreciated. The question of practical interest is whether the changes in the relative values of the precious metals are causing serious evils, and whether it is possible to remove these evils without causing other evils equally great. The question of the appreciation of gold or depreciation of silver is really subsidiary to this main issue. If it can be shown that the changes in the relative value of the precious metals are causing serious evils and that it is possible to remove these evils without causing other evils equally great' it will be just as desirable to do so, whether we hold that gold has appreciated and silver depreciated, or come to the conclusion that silver has appreciated and gold depreciated. 7. I propose, therefore, to invert to some extent the order of the reference and to consider in the first place what evils (if any) the changes in th^ relative values of the precious metals are causing, and whether it is desirable to attempt to remove them. I shall entirely avoid the use of the terms appreciation of gold and deprecia- tion of silver, unless when referring to arguments in which these phrases are used, and I shall deal with the facts which are alleged to indicate appreciation of gold or depreciation of silver, simply as a portion of the evidence of the existence of evils arising from the alterations in the relative value of gold and silver. Acknowledged Evils caused by the Changes in the Relative Value of the Precious Metals 8. It is an evil of great magnitude that since 1873 the nations of the world should have been divided into two groups using different metallic standards, which in that NOTE BY MR. BABBOUE. '33 time have altered nearly 30 per cent, in relative value. Every person in this country who had his capital invested in silver standard countries has, from his point of view, lost on an average two per cent, of his capital every year for the last 15 years. Every person residing in a silver standard country who had his capital invested in a gold-using country, finds that Rs. 1,000 so invested is now worth very nearly Rs. 1,430 ; a gain, from his point of view, of 43 per cent, in that time, or very nearly three per cent, per annum, over and above whatever the rate of interest on his investment may have been. Competing 9. Nor is it reasonably open to doubt that competing industries in the gold and ];^fah-iy^^ silver countries respectively have been seriously affected by such a change. Adjust- influenced ments of wages and fixed charges are no doubt continually taking place, but adjust- by the exist- ments corresponding to an alteration of 30 per cent, in price can hardly have taken ^^'^^ °^ place with complete effect in so short a time, and where these adjustments take the ™°n^arS form of a fall in wages they are necessarily attended with friction, loss, and incon- fluctuating Venience. in relative value. 10. So marked a change in the relative value of the two standards in the short space impediment of 15 years necessarily produces a feeling of uncertainty as regards the future, and to free trade those who have capital to invest must seriously consider the relative advantages of in capital, investment in gold standard and silver standard countries. This argument applies not merely to investments at a fixed rate of interest, but to investments for profit in industrial enterprises. The excess rate of profit in industrial enterprises conducted on a silver basis must be su£6.cient to balance the prospect of a loss of capital from a fall in the relative value of silver, and an exaggerated estimate of the probability of such loss, and of its amount, would doubtless be taken by many, if not most, investors. I do not hold the extreme view that there would have been no fall in the rate of interest and no reduction in the rate of profit in industrial enterprises in gold-standard countries if there had been no currency changes, and no divergence in the relative value of gold and silver, for there have obviously been other causes at work which would, in any case, have produced a material effect in this direction. On the other hand, I see no reason to doubt that the uncertainty as to the future relative value of the two standards, and the prospect of a fall in silver relatively to gold, have checked the flow of capital to silver- standard countries, and caused it to be retained in gold- standard countries more largely than it otherwise would have been, and that both the rate of fixed interest and the rate of profit in industrial enterprises are lower in gold countries and higher in silver countries than they would have been if there had been a common standard. These are the results which would naturally flow from such a state of things, and the actual facts, so far as we are acquainted with them, confirm the conclusions based on what may be called theoretical considerations. 11. Before passing from this portion of the question it is desirable to caU attention Effect of the to the effect which the alteration in the relative value of the precious metals has change in the had on the value of the savings of those nations whose accumulations of wealth largely relative value take the form of hoards of the precious metals. _ cioL^metals The native of India who put away Rs. 1,000 in silver in 1873 now finds it worth on the value exactly Rs. 1,000 ; but the native of India who hoarded Rs. 1,000 in gold in 1873 of hoards, now finds his hoard worth about Rs. 1,430. The hoard of each has been equally safe, but the one has made a gain of 43 per cent, as compared with the other. This fact has a special bearing on Ihe possible results of any further steps in discarding silver as standard money. The alteration in the relative value oE silver, hitherto, has been gradual and Possibility of unforeseen. Every rise in the silver price of the metal gold acted for the time as a ^"*"'^® ^^}^' check on purchases of that metal, but attention has now been directed to the question fromttiTs"^ of the relative value of the precious metals, and every step towards the further case, demonetisation of silver would have an exaggerated importance attached to it. If the opinion prevailed in the Bast that the gold price of silver would fall another 30 per cent, during the next 15 years, an impulse would be given to the hoarding and accumulation of gold in preference to silver, and to the withdrawal of capital from silver countries, which might have very serious results. 12. The fluctuations in the relative value of gold and silver are also a distinct hindrance to trade between gold and silver using countries, but on this point I do not desire to add anything to what is contained in Part II. of the Report. R 3 134. KOYAL COMMISSION ON GOLD AND SILVER: Financial 13. The fall in the relative value of silver has most injuriously affected the difficulties of financial position of the Grovernment of India. Taking the average price of silver at m^n?°r^°' ^Os^' pel" standard ounce in former times, and its present price at 42c?. per ounce, the Sa.*' increase in the number of rupees required to meet a fixed gold obligation is very nearly 45 per cent. In other words, a fixed charge which could formerly have been met by the expenditure of 1,000,000 of rupees, now requires the expenditure of no less than 1,450,000 rupees. This change not merely imposes a burden on the Indian finances at the present time, but the uncertainty as regards the future exercises a paralysing influence. If no remedy can be devised, the only safe course will be for the Indian Government to avoid as far as possible contracting any new obligations payable in gold, and for India to depend more and more upon her own resources of all kinds and those of other silver-using countries, and even this policy may, in the case of the occurrence of events which are not beyond the range of probability, fail to avert political and economic dangers of a very serious character. Eesponsi- 14, jSfor can Great Britain divest herself of her responsibility in this matter by p^^*^^ ^ . ■ allowing the Indian Government to act as it may think best. The Government foi-Thesr*^'" of India is only another name for the agency whereby the administration of the difficulties. Indian Empire is carried on by this country ; the gold obligations which now con- stitute the difficulty of the Indian Government were incurred with the knowledge and approval of the English Government, and are very largely due to the connexion between the two countries ; the original impulse towards the monometallic gold standard, from which have sprung the existing currency difficulties, was given by England in 1816 ; it was strengthened by her suggestion, in connexion with the International Monetary Conference of 1867, that France should adopt the single gold standard ; and the interests of England and India are now so intimately connected that they cannot be separated in a question of this kind. If Great Britain cannot, with reference to her own position and interests, take such steps as will relieve India from the existing currency difficulties, justice requires that in deciding on any measure which India may be in a position to adopt in connexion with the settlement of the question the interests of India alone should be considered, but this course will neither relieve Great Britain from her responsibility in the matter, nor protect her from the consequences, direct and indirect, of further currency changes, or of changes in policy on the part of the Indian Government rendered necessary by existing financial difficulties. Effect of the Alteration in the Relative Value of Gold and Silver on Prices measured in Gold. ftices of articles 15. Gold and silvcr haviuff altered in relative value, it follows that there must be a of international ..9 , -, -,.-.. ... , TOnuneroemust correspouding alteration m the actual gold and. silver prices or articles interchanged accordance with betwccu couutries usinff these metals as standards of value, subject of course to such the variation in -,- n ■ i ^ ittj_i- -i ""^^^j the relative value modifications as may have been caused by alterations m the cost of transport of No such imme different commodities between the two groups of countries. diate and exact i • i i , • i i t variation need bo much IS beyond question, but theory does not require us to believe that "facrS^th^'^'' there is necessarily an immediate and corresponding alteration in the prices of articles case of wages not SO interchanged, or in wages paid in gold and silver countries, and as experience artide^s"not °^ ^'^^^ '^o* show that any such change takes place at once, and to the full extent, it entering into should not be assumed that this is the case. ^ationlTtrade '^^^ qucstion, SO far as concerns countries using the gold standard, which we must between gold- now attempt to decide, is this :— sUveiushig How far have the alterations in the relative value of ^ gold and silver been attended countries. with a change in gold prices and wages in the direction of a fall ? "Would any of this fall have been prevented if no currency changes had been made, and would such prevention have been a gain or the reverse ? The fall in 16, The prices to which we should look in the first instance in dealing with this the gold price problem are those of the articles which are interchanged between the gold and of silver silver countries, and they are practically all the main articles of international trade. accompanied It is in the prices of these articles that the full effect of the alteration in the relative with a fall in yalue of gold and silver must disclose itself at once, and it is through them that a the gold connexion is established between the scales of wages, and of prices of articles locally prices, and produced and consumed, in different countries, not with a i NOTE BY MK. BARBOUR. i«''' As to the course of gold and silver prices of these articles in recent years there rise in the is no room for doubt. The alteration in prices corresponding with the altered value ^^ ^^jj^j^g^^^/ of gold and silver has affected gold prices and not silver prices; the latter prices t^e inter- appear to have fallen rather than risen. The facts are so obvious and have been so national fully set forth as to make it unnecessary to repeat the statistics which prove them. trade. 17. As regards articles of minor importance, locally produced and consumed, and which do not to any considerable extent enter into the international trade of the world, our information is much less complete. On the whole there would appear to be a tendency to a fall in such prices in this country. There is very little evidence as to the prices of similar articles in countries using the silver standard, but such evidence as is forthcoming does not show any marked tendency towards a rise in prices. 18. Statistics of wages are difficult to collect and combine, and those which exist Decided are very defective. In this country there is distinct evidence of a fall in wages, but tendency to a the fall has not aflFected all industries in the same proportion. It has been said that ^^^J^ ^nd in some countries using the gold standard there has been no fall in wages, but, so no very far as the evidence before the Commission goes, there is no proof either on one mai-ked side or the other. In India, which may be taken as the best example of a silver-using tendency^ country, there would appear to be a decided tendency towards a rise in the wages of gnveAvages. some kinds of skilled labour, but not much change in the wages of unskilled labour, and the increase in railways and mills in that country would naturally be attended with an increased demand for skilled labour. Alleged Causes of the General Fall in Gold Prices and of the Divergence in the Relative Value of Gold and Silver. 19. I have stated briefly the facts (very imperfect), so far as information is avail- able, regarding the course of wages and prices as measured in gold and silver respectively in recent years, and it will now be convenient to notice some of the explanations that have been given of the influences which have caused gold prices to fall and gold and silver to diverge in relative value, and to consider how far these explanations are consistent with ascertained facts. 20. Before doing so I wish to call attention to certain very common errors and prepossessions which are liable to influence, unconsciously, the reasoning of those who deal with questions connected with the currency. It should be borne in mind in the first place that there never was, and never can be, A fixed and such a thing as a fixed and invariable standard of value which will measure any invariable quantity of wealth in the same way and with the same accuracy as the yard measure valine ^an ka- will measure length ; and in the next place that the pound sterling is a certain weight possibility. of a metal called gold, and that gold is a commodity, and liable to vary in value according to the law of supply and demand, like all other commodities. It should also be recollected that every one using any commodity as the standard of Preposses- value treats it in practice as absolutely fixed in value, and measures all variations thTstabilit in the relative value of other commodities by means of it, and that consequently the of ae^stan- impression gradually grows up that the standard of value is in reality as invariable dard which as it seems to be. That no standard of value is, in this sense, invariable, is easily seen "^^ ^^'^ '^J^ by contrasting the fluctuations in the relative value of any two articles used inde- '^^ ^^^^^ °^ pendently as standards of value. The alteration in the relative value of the gold and "^^°^' silver standards in recent years is a case in point. 21. A jury of Englishmen, drawn from the ranks of men engaged in practical business, would almost irresistibly be led to the conclusion that gold had been perfectly stable in value in recent years, and that silver had fallen in value, and they would be able to give plausible reasons for holding that opinion. A jury of Chinamen, or natives of India, would have an equally strong bias in the other direction, and would have just as little hesitation in declaring that it was a matter falling within their daily experience as practical men of business, that silver had remained steady in value, and that the change was in gold ; nor would they experience any difficulty in asserting equally plausible reasons for this opinion. It is this prepossession which leads so many men of practical experience in financial matters to hold opinions which involve the assumption that the supply of, and demand for, gold have really no effect on the value of that metal. If more gold is produced it R 4 136 ROYAL COMMISSION ON GOLD AND SILVER : First theory, that the fall in the gold price of silver wotilcl he followed by a rise in silver prices. Disproved by a faU in gold prices and not by a rise in silver prices. Second theory, that the in- creased produc- tion of silver prevented a great fall in silver prices, due to cheaper production of commodities. Unsupported by the facts as to the relative pro- duction of gold and silver. And disproved by an examination of tlie relative amounts of new gold aod silver placed on tlie market. A considera- tion of the relative de- mand for the two metals points to the same con- clusion. Great de- mand for gold for non- monetary purposes. is absorbed into a vast ocean of circulating medium without producing any perceptible effect ; if less gold is produced, and if tbe demand for gold increases, the deficiency is at once made up by an expansion of credit. In short, they appear to believe that by an accidental and unregulated combination of the metal gold, and of credit in its innumerable forms, which expands or contracts according to subtle influences operating on the human mind, we have obtained a measure of value which is as perfect in its way as the yard or inch, though nothing is more certain than that such a measure of value can exist only in the imagination. 22. When the gold price of silver began to fall, the opinion was very generally entertained that the fall was due to increased production of silver. It was argued that silver would flow in increasing quantities to the silver-using countries, and that prices and wages would rise in those countries. Attention was called as early as 1876, by the Government of India, to the fact that it was gold prices that were falling, and not silver prices that were rising, and the experience acquired since that year has con- clusively shown that the fall in the gold price of silver has been accompanied by a great fall in gold prices and not by a rise in silver prices. It has lately been said that the explanation was incomplete, and not positively erroneous ; that simultaneously with the great production of silver, there was a great lowering of the real cost of producing commodities ; that gold prices have fallen from this cause, and that the fall in silver prices, which would have taken place from a lowering of the cost of production of commodities, has been balanced by the increased production of silver. It can be shown that the facts relating to the supply of, and demand for, the precious metals lend no support to this theory. 23. In 1881-85, as compared with 1866-70, the production of gold fell off by about 6,000,000L sterling yearly, while the production of silver only increased by about 12,000,0002. sterling yearly (valuing silver at the ratio of 1 to 15^). Why should an increase of 12,000,000Z. yearly depreciate the silver standard by about 22 per cent., when a decrease in the production of gold by 6,000,000L' yearly had no effect on the gold standard ? If we consider the increased demand for both gold and silver by the United States in recent years, we obtain very remarkable results. The figures given in para. 36 of Part I. show that the supply of new gold to the markets of the world outside the United States was less in 1881-85 than in 1866-70, or even 1871-75, by no less than 15,000,000^. yearly ; while the figures in para. 27 (c) show that the excess yearly supply of silver in 1881-85 over the supply in 1866-70 was only about 5,300,000^., and there was practically no increase of supply in 1881-85 as compared with 1871-75. Why should a reduction in the supply of gold to certain countries to the extent of 15,000,000Z. sterling yearly not affect the value of gold in these countries, when an increase in the supply of silver by 5,300,000^. yearly has so marked an effect on the value of that metal ? It cannot reasonably be argued that a falling off of 63 per cent, in the supply of gold to certain countries' had no effect on the value of gold in these countries, while the maintenance of the same average supply of silver to India lowered the value of the standard of that country by 22 per cent. 24._ The argument that the divergence in the relative value of gold to silver is not due simply, or mainly, to increased supply of silver relatively to the demand for that metal, is strengthened when we consider the alterations in recent years in the respective demand for the two metals. _ Wherever, outside the United States, gold has been substituted for silver the increased demand for gold should equal the reduced demand for silver. In addition gold has been substituted for paper to some extent, and the fact that a large quantity of silver com is now over-valued, and not available for international purposes, as well as other causes, has led to considerable accumulations of gold in certain countries over and above what would in other circumstances have been thought necessary. Another important factor in the question is the apparent growth of the demand for gold for non-monetary purposes. On this point I cannot do better than quote the words of Dr. Soetbeer. "I have already ventured upon the attempt to make an approximate estimate of the application of the precious metals to industrial purposes in the civilised countries taking an average of the last few years, of course allowing a large margin for error. ' NOTE BT MK. BARBOUK. 137 " I have again brought them forward because there are applicatious of the metals which were then either partially or wholly unknown to me, and which might lead to an alteration of the estimate. However considerable the colossal sum of gold annually applied to ornamental and other industrial purposes may at first sight appear, all doubt of the probable truth of the estimate will disappear when we consider how enormously the demand for gold articles and for manufactured gold goods has arisen, owing to increase of population and prosperity. "In silver, unfortunately, no such additional demand for industrial purposes has been hitherto noticeable." It is worthy of notice that while the total yearly supply of new gold to countries outside the IJnited States appears from' , the figures given in paragraph 36 of Part I. to have been only 9,672,000?. in recent years. Dr. Soetbeer estimates the consumption of new gold for industrial purposes in the same countries at 70,500 kilos, yearly, or about 9,835,000Z. sterling. It follows from these figures that the total supply of monetary gold in civilised countries outside the United States in very recent years must actually have been diminishing by the quantity necessary to make up the amount by which the supply of new gold fell short of the quantity used for industrial purposes and absorbed in the less advanced countries. 25. In face of the facts just stated there appears to be no good ground for the con- tention that gold prices have fallen (say) 28 per cent., simply from altered cost of production of commodities, and that silver prices have not fallen 28 per cent., owing to the influence exerted on them by the increased production of silver and reduced demand for it. A fall in the gold price of silver amounting to 28 per cent., assuming the gold prices of commodities to remain stationary, would necessitate a rise in eilver prices of no less than 39 per cent. To believe that the alterations in the demand for, and supply of, the precious metals just referred to, have not affected gold prices in any degree, and have exercised an influence on silver prices corresponding to that which would be required to raise them 39 per cent., is practically to suspend the operation of the law of demand and supply in the case of one of the precious metals, while holding that it applies in full force to the other. No satisfactory reason can be shown for making such a distinction between the laws afiecting the value of gold and those affiecting the value of silver, and this contention appears to be due to that prepossession in favour of the stability of the standard of value which we are accustomed to use to which I have already referred. 26. The following figures are not without interest in connexion with this portion of the question : — . Period. Average Yearly net Imports of Gold into England. Average Yearly net Imports of Silver into India. 1858-60 1861-70 1871-76 1877-80 1881-85 £ .3,795,000* 5,546,000* 3,345,000* - 1,^00,000 - it6S,ooo £ 10,300,000t 9,700,000t 2,800,0001 8,400,0001 6,100,000t Laws regu- lating the value of silver not different from those regulating the value of gold. * Financial years. t Ten rupees taken as equivalent to one pound sterling. I do not know how it can reasonably be contended that the Indian standard in 1885 was depreciated to the extent of 25 per cent, as compared with the years 1858 to 1870 by an excess supply of silver, when the supply of silver was one-third less in the latter than in the former period, and that at the same time the English standard was wholly unafiected, although the supply of new gold actually ceased for a time, and more gold was exported than imported. The accuracy of the English figures of the import and export of gold is no doubt open to question, but I do not think it can seriously be questioned that the supply of new gold to England has materially fallen off in recent years. 27. As the statistics of the demand for, and supply of, the precious metals, show that the influences tending to raise the value of gold have been of greater magnitude than those tending to lower the value of silver, an attempt has been made to show A 56136. S Illustration! of the un- soundness of the argu- ment that the increase supply of silver to India has depreciated the standarc of that country by 25 per cent. Third theor that the economies of gold hav« 138 ROYAL COMMISSION ON GOLD AND SILVER: counteracted that credit and expedients for economising gold have counteracted the effects of the the increased undoubted increase of demand for gold and reduction in supply. Indefinite meaning of " credit." Credit is a term of wide and indefinite meaning, and appears to include a number of things differing in themselves and in their effects on prices, or the relation of exchange of the standard commodity for other commodities. It is conceivable that a system of credit might effect an economy of gold ; might enable 500,000 sovereigns to do work which formerly required 1,000,000 sovereigns. So far its influence would be exerted in the direction of lowering the value of gold and so increasing prices, by practically increasing the supply of that metal. It is also not merely possible but probable that at certain times a great extension of what is called credit merely indicates the springing up of a new class of business for which credit is required, and an extension of credit of this nature could not have any direct effect on the value of gold. A great extension of credit in a poor and backward country might have the effect of enabling men of enterprise to obtain a supply of capital, and might in this way increase the quantity of commodities produced, and so have a material effect in the direction of reducing the prices of certain articles. The increase of wealth which vvrould accompany this increase of commodities might in turn increase the demand for gold, and thus have a further effect in lowering prices. It would obviously be impossible in such cases to analyse the resultant alteration in prices, and say how much of it was due — (1) To positive economy of gold ; (2) To increase in the quantity of commodities ; (3) To increased demand for gold. No proof of 28. It has been urged that there have actually been such increases in the economies any net ^f g^]^ j-^ recent years as to counterbalance the special demands for that metal and gold in *^^ falling off in supply. I can only say that, so far as I can form a judgment on recent years, the question, this fact has not been proved, and that, on the whole, there does not appear to be any evidence in support of it in which confidence can be placed. Even assuming that there has been a great extension of the banking system on the Continent in recent years, there is not a particle of evidence to show that such extension has done more than, or even so ranch as, cover the increase of that class of business in which credit is ordinarily employed. An extension of credit may in some cases effect an economy of gold. Or it may merely meet a new demand. Or it may actually in- crease the demand for gold. Increased demand for gold in France. Arguments regarding the economies of gold effected by credit, railways, and telegraphs disproved by a considera- tion of the case of the United States. ; In Pecember 1873 the note circulation of the Bank of Prance amounted to 2,886,300,000 francs, while the total amount of gold in the bank was only 611,300,000 francs. In June 1886 the note circulation was almost the same (2,828,308,470 francs), while the gold reserve was 1,377,367,074 francs, showing an increase in the use of gold of over 30,000,000Z. sterling. If we included the increase in the metallic reserve in the form of silver coins (equivalent ' in France to gold) the total additional demand would be more than 69,000,000L I can find no evidence of any economy of gold in recent years which would in any appreciable degree balance so great an increase in demand. 29. Stress has also been laid on the economy in the use of gold effected by the extension of railways and telegraphs. That some economy is effected in this way cannot be doubted, but it is impossible to show the amount of the economy, and it is probable that the increase in wealth due to the construction of telegraphs and railways, and the stimulus to the exchange of commodities between different regions to which they give rise, more than counterbalance the economies. The case of the United States in recent years affords a striking example of the futility of attempting to argue that the extension of credit and the construction of railways and telegraphs necessarily effect any considerable economy in the use of gold. It is stated by the Hon. David A. "Wells that " there has been during the last 15 years a " great development in the United States in the use of cheques, bank credits, and " bills of exchange, and other instrumentalities whereby the use of precious metals '^ is economised." And we know that simultaneously there has been a marvellous extension of railways and telegraphs- These changes are put forward as the great causes of economy in the use of gold, and yet we fiiid that simultaneously the demaaid for, and absorption of, gold by the Umted States has very greatly exceeded that of any other country. NOTE BY MR. B'AftBOTrK; 1'39 30. It is hfirdly necessary to examine the alleged instances of the economies of gold Amount in this country, based on such facts as the great extension of the use of postal notes g^^^^^^^jj^g and cheques for small amounts. In neither case is any attempt made to estimate the ^^ ^^ j^ actual amount of the economies of gold, and in the case of postal notes it can be this country shown that the economies are, at best, comparatively trifling. In the case of cheques unproved, for small amounts, there has probably been some economy ; but there is little reason ^^^^ nificantf to suppose that its amount is considerable, or sufficient to meet the increase in the demand for gold, which naturally follows an increase of wealth and population. It is probable that the increase in the number of cheques for small amounts arises, to some extent, from a change in the mode of business, due to the habit of paying at once instead of running up bills. 31. I understand, however, from § 50 of Part II., that the theory of the fall in the value of silver owing to the mere increase in -the quantity of silver produced is practically abandoned, and that the fall in the value of silver is ascribed according to one theory to the increase in quantity plus sentimental considerations which acted on the value of silver when it ceased to be freely coined into money in the "West, and according to another theory to the increase in quantity coinciding with a great cheapening of English goods and an increase of the international indebtedness of the countries which chiefly absorb silver, and especially of India. These theories are contained in §§ 51--67 of Part II., and the following is as correct a summary as I am able to make. Gold prices have fallen on account of the increased or cheaper production of Theory of commodities. Other things beina: equal, silver prices would have fallen to the same the fall in • • trip 'nnof* or extent, but it so happened that simultaneously silver became a mere commodity in gjj^^ owing the West and in the United States. Apprehensions were entertained regarding its to senti- future ; sentimental considerations play a great part in determining market prices ; a mental depressed market, in the absence of some new stimulus, generally tends to further considera- depression, and consequently a direct effect was produced on silver in excess of what' might reasonably be anticipated from a consideration of alterations in its supply and monetary use only. The case of gold was different. There is no great central market where gold is disposed of by sale, where the daily quotations of price influence men's minds. Consequently, assuming the alterations in the supply and use of the two metals to be of equal potency, a greater depreciation of silver might be manifested than of gold. The second theory is that, simultaneously with the great and general reduction in Theory that cost of production which is said to have occurred, there was an increased production cheapening of silver to the extent of 10,000,000Z. yearly. This was primarily an addition to ties balanced the markets of the civilised world. In this portion of the world there was a stock of cheapening about 392,000,000L worth of silver coins, but the whole of this amount was maintained oi silver, and at an artificial value, with the exception of about 82,500,000L Consequently, the *^^* *.^® . addition of 10,000,000L yearly to a stock of only 82,500,OOOL had a great effect on the febtedness^'of value of silver, and silver fell largely in value in the markets of the civilised world. Indiareduced The East, and India especially, is the great absorber of silver, and under ordinary for silver, circumstances this silver would have flowed to the Bast and raised wages and prices ; but simultaneously there was a great and general cheapening of production, leading to a fall in gold prices, so that the fall in gold prices balanced the profit to be derived from exporting the cheap silver and importing Eastern goods, and consequently there was no increase of demand for silver. There has also been a growing balance of indebtedness against India which helped to reduce the demand for silver in that country. 32. The preliminary objection to this method of dealing with the question is that Gold prices gold and silver have not been treated alike. Causes have been shown to exist which ^°<^ ^^^^^^ would tend to cause a fall in the prices of certain commodities, whether measured in j"u^ °th ■ gold or silver, and it has been assumed (not proved) that these causes were sufficient to thesameway. balance the effect of any influences which may have tended to cause a rise in prices, and, in addition, to cause the whole, or nearly the whole, of the fall in gold prices which has actually taken place. The fall in gold prices having been explained by this means it became necessary to account for the absence of so great a fall in silver prices, and theories have been devised for this purpose, which appear to me to be far-fetched and insufficient. I venture to think that it is not possible to test variations in the standard of value Impossible ' " " " " ~ ■ " " " " " " to test varia tions in the ])y examination of the prices of particular commodities, and that to whatever standard *° ^^^^ v&na- S 2 140 ROYAL COMMISSION ON GOLD AND SILVER: Standard by examining First Period. NOTE BY ME. BARBOUR. 157 Year ending — £ April 1,1881 - - - 17-" „ 1882 - - - 17- „ 1883 - - - 17-4 ., 1884 - - - 17-6 „ 1885 - - - 17-5^ „ 1886 - - - 17-3 ^TMrd Period. •0-1 •2 1 Second Period. „ 1887 - - - 17-lJ It should be recollected that certain changes were made -which, affected the returns for 1877, and of course the amount assessed rather follows than keeps pace with the actual income. 14. It is instructive to compare the figures in this paper with the following facts regarding the fall in the gold price of silver. Between 1872 and 1879 the fall in the price of silver was from &0-^d. per oz., to 51;^^. per oz., being \'22d. per oz. yearly, or 2-1 per cent, yearly, spreading the percentage of fall uniformly over the seven years. Between 1879 and 1884 the fall in the price of silver was from 5\\d. per oz., to 50fcZ. per oz., being only •12^^. per oz. yearly, or '23 per cent, yearly. From 1884 to 1887 the fall in the price of silver was from 50^d. per oz., to 44|(Z. per oz., being 2d!, per oz. yearly, or 3 '9 per cent, yearly. Not merely, then, is there a certain amount of agreement between the yearly fluctuations of gold prices of commodities, and the gold price of silver, but there is a very close agreement in the three well-marked periods into which the years since 1873 naturally fall. . 15. It would appear that since 1873 there has been some law closely coimecting the fall in gold prices with the fall in the gold price of silver, though its working is obscured by other influences. But changes in the relative value of gold and silver may at one time be accom- panied by changes in the level of gold prices, silver prices remaining comparatively unchanged, and at another time by changes in the level of silver prices, gold prices remaining more nearly the same. . ' Within the last two years, average gold prices have ceased to fall, and may even have risen slightJy, but silver has continued to fall, though the rate of fall in 1887 and 1888 is less than in 1885 and 1886, and there has been recently a cessation of fall and even a certain amount of rise. Note by Mr. Samuel Montagu, M.P. While agreeing with Part III. of the Report, I' consider it necessary to indicate what, in my opinion, would be the most desirable ratio to fix and maintain by an Inter- national Convention. I fear that the divergence of gold and silver has extended so far that the reversion to the old ratio of 15^ to 1 could not take place without certain disadvantages. I prefer, therefore, that a ratio of 20 to 1 should be the one selected at an International Conference. If that course were adopted the large export trade from India would remain un- afl'ected, and in consequence we should continue to import raw materials from India and China at moderate prices. On the other hand, the Indian Government could calculate on a stable price for silver of about 4s. per oz., and a steady exchange of about Is. Qd. per rupee, thus avoiding all the dangers which a further fall of silver would produce. The probable effects of the establishment of a ratio of 20 to 1 are indicated in a paper submitted to the Commission and printed in the Appendix. It is also necessary to call attention to the fact that, owing to the depreciation of silver in gold-using countries, illicit coinage in good silver has taken place. Fears are entertained that with a further fall in the gold price of silver this evil is likely to extend, especially in this country, our coinage being issued at 5s. &d. per ounce, or at a premium of over 50 per cent, above the present market price of silver. It is therefore argued that unless a bimetallic convention be efiected, our coinage should be increased in weight at an expenditure of several millions sterling. (Signed) Samuel Montagu. GOLD AND SILVER COMMISSION. FINAL REP OUT OP THE ROYAL COMMISSION APPOINTED TO INQUIRE INTO THE RECENT CHANGES IN THE RELATIVE VALUES OF THE PRECIOUS METALS; With Minutes of Evidence and Appendixes. ^rfgentelr to fiotl) ^ousitg of ^arliamtnt Ijp Commanti of ^tt iWaiesJtp. LONDON: PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, BY EYRE AND SPOTTISWOODE, PRINTERS TO THE QUEEN's MOST EXCELLENT MAJESTY. And to be purchased, cither directly or through any Bookseller, fkom EYRE AND SPOTTISWOODE, East Harding Street, Fleet Street, E.G., and 32, Abingdon Street, Westminster, S.W. ; or ADAM AND CHARLES BLACK, 6, North Bridge, Edinburgh ; or HODGES, FIGGIS, & Co., 104, Grafton Street, Dublin. IsssT GOLD AND SILVER COMMISSION. APPENDIX TO FINAL REPORT OF THE ROYAl. COMMISSION APPOINTED TO INQUIKE INTO THE RECENT CHANGES IN THE RELATIVE VALUES OF THE PRECIOUS METALS. MiivuTES OF Evidence, &c. ^resfmteli to hotf) ^otisfess of parliament ijp Command of ^er iWajegtg. LONDON : PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, BY EYRE AND SPOTTLSWOODE, PKINTEKS TO THE QUEEN'S MOST EXCELLENT MAJESTY. And to be purchased, either directly or through any Bookseller, frota EYRE AND SPOTTISWOODE, East Harding Street, I'leet Street, E.G., and 32, Abingdon Street, Westminster, S.W. ; or ADAM AND CHARLES BLACK, 6, North Bridge, Edinburgh ; or jL . HODGES, FIGGIS, & Co., 104, Graftoj,' Strekt, Dublin. 1888. [C— 5512 -I.] Price 2s. lOd. GOLD AND SILVER COMMISSION. APPENDIX JO FINAL REPORT OP THf) ROYAL COMMISSION APPOINTED TO INQUIRE INTO THE RECENT CHANGES IN THE RELATIVE VALUES OF THE PRECIOUS METALS. Minutes of Evidei^^ce, &c. ^ve^etiWa to fiotii i^ousjee of ^avliammt fip crommanii of l^er Mamt^^ LONDON: PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, BY EYRE AND SPOTTISWOODE, PBINTEKS TO THE QUEEN'S MOST EXCELLENT MAJESTY. And to be purchased, either directly or through any Bookseller, from EYRE ANK SPOTTISWOODE, East Hahding Street, Fleet Stkeet, E.G., and 32, Abingdon Street, Westminster, S.W. ; or ADAM and CHARLES BLACK, 6, North Bridge, Edinburgh; or HODGES, FIGGIS, & Co., 104, Grafton Street, Dublin. 1888. [0.— 5512.-I.] Price 2s. lOd. TABLE OF CONTENTS. Page LIST OF WITNESSES EXAMINED BY THE COMMISSION - - - - iii MINUTES OF EVIDENCE ....-.--- 1-77 LIST OF APPENDICES 78 APPENDICES 79 ANALYSIS OF EVIDENCE AND INDEX - - - - - - - 245 LIST OF APPENDICES TO THE REPORTS OF THE COMMISSION - - - 259 NOTE.— REPORTS ISSUED BY THE COMMISSION. FIRST REPORT, dated June 1887 [C— 5099]. SECOND REPORT, dated January 1888 [C— 5248]. FINAL REPORT, dated October 1888 [C— 5512]. (With Appendix in separate volume.) LIST OF WITiVESSES EXAMINED BY THE COMMISSION. NAMES OF WITNESSES AERANGED IN ORDER OF DATE. 1886. Nov, .19. j» 25. » 25. » 26. Dec. 3. jj 8. » 8. JJ 9. JJ 9. 1887. Feb. 1. J> 4. JJ 8. JJ 11. )J 11. )) 15. 3J 18. JJ 25. J> 28. Mar, , 4. April 26. !> 29. May 6. JJ 9. JJ 13. J3 16. JJ 16. JJ 20. JJ 23. JJ 23. 1887. June 10. JJ 24. July 1. JJ «. JJ 11. JJ 15, JJ 18. JJ 25. Nov. 4. JJ 7. JJ 11. JJ 14. JJ 18. JJ 21. ?j 25. JJ 28. Dec. 2. JJ 5. JJ 9. First Keport. Page Me. R. H. Inglis Palgeate, F.E.S. ---.... i Me. S. Pixlet - - - - - - - .. -8 Sm Hectoe Hay ------.-.. 13 Mk. E. Gipfbn --.......-19 J, „ .......... 34 Me. a. Saueebeck ......... 47 Me. D. M. Baebour, C.S.I. ..-.-... 57 Peofessoe Robeets Austen, F.R.S. ------- 62 Mb. J. W. BiECH .....------ 67 Mb. S. Montagu, M.P. .--.----- 71 Me. H. Wateefield, C.B. .-.-...- 77 Me. J. K. Bythell - - - - - - - - - 92 Me. J. Taxboys Wheblee ..---..- 1O8 Me. Robeet Baeclay - - - - - - - - - 110 Me. H. Wateefield, C.B. .-.--..- 122 Me. p. F. Tidman, C.M.G. ..-.--.. 137 Me. H. H. Gibbs ---------- 147 Me. a. D. Peovand, M.P. -------- 159 Me. H. H. Gibbs ---------- 171 jjjj ""-------- 183 Peofessoe ,7. Shield Nicholson- ..---.- 193 Me. H. R. Gebnfell ------„--. 213 Me. H. H. Gibbs - -■ - . . - . - . - 228 Me. Samuel Smith, M.P. -------- 241 Me. David McLean -.--...--- 257 Me. H. H. Gibbs -.--..... 26I Peofessoe J. Shield Nicholson -------- 275 Me. H. H. Gibbs --------.. 293 Me. Samuel Smith, M.P. - , - - - - - - - - 300 Second Keport. Me. S. Williamson, M.P. .---.... Me. J. Babe Robeetson - - - - - - - - _ g Me. Thomas Combbe -----.-..26 Me. Beeteam Cbeeie -------.-39 Me. H. L. Raphael --------- 53 SiE Etelyn Basing, K.C.B., K.C.S.I. ------- 64 Me. H. D. Maclbod -----,.._ yg Me. H. Wollaston Blake -------- 83 Me. J. C. Fielden --------- 92 Me. William Fowlee -----..._ jqq J, J. --------- 111 Me. J. C. Fielden ------_.. 224 Me. Thomas Combee - - - -- - - - . jsg Me. William Fowlee -------.. 2^43 Me. H. Schmidt - - - - - - - - - - 161 Lord Beamwell - - - - -- - - - _ 175 Me. William Fowlee - - - - - - - - - 188 Me. Daniel Watney .-----.._ 203 LoED Addington ---------- 211 Final Eeport (Appendix.) 1887. Page Dec. 19. Peofessoe Maeshall --------- 1 1888. Jan. 16. Peofessoe Maeshall - - - - - - - - - 17 20. Me. J. NisBBT ---------- 33 23. Peofessoe Maeshall --------- 38 27. Me. R. B. Chapman, C.S.I. -------- 5.^ Feb. 6. Me. E. Sassoon ---------- 64 6. Mr. Dadabhat Naoroji - - - - - - - - - 71 ly NAMES OF "WITNESSES IN ALPHABETICAL ORDER. Lord Addington Peofessoe Robeets Austen, F.R.S. Me. D. M. Baeboue, C.S.I. Mr. Robeet Baeclay Sir Evelyn Basing, K.C.B., K.C.S.I. Me. J. W, Birch - Me. H. Wollaston Blake - LoED Bramwell - - . Mr. J, K. Bythell - - . Mr. R. B. Chapman, C.S.I. - Mr. Thomas Comber Me. Beeteam Cdreie - - Me. J. C. FlELDEN - Me. William Fowler Mr. H. H. Gibes - Mr. R. Gipfen - . . Mr. H. R. Gebnfell SiE Hector Hay ... Me. D. McLean Me. H. D. Maclbod- Peofessoe Maeshall Me. S. Montagu, M.P. Me. Dadabhai Naoeoji Peoees-soe J. S. Nicholson Me. J. NisBET ... Me. R. H. Inglis Palgeave, F.R.S. Me. S. Pixley - . . Me. a. D. Peovand, M.P. - Me. H. L. Raphael- Me. J. Baee Robeetson Me. E. Sassoon - - - Mb. a. Saueebeck - - . Mr. H. Schmidt Me. Samuel Smith, M.P. - Me. p. F. Tidman, C.M.G. - Me. H. Watbeeibld, C.B. - Me. D. Watney Me. J. Talboys Wheeler - Me. S. Williamson, M.P. - II. I. I. I. II. I. II. II. I. Final. II. II. II. II. I. I. I. I. I. II. Final. I. Final. I. Final. I. I. I, II. II. Final. ]. II. I. I. I. II. I. II. 211 62 57 110 64 67 83 175 92 53 26, 138 39 92, 124 100, 111, MS, 188 147, 171, 183, 228, 261, 293 19, 34 213 13 257 72 1, 17, 38 71 71 198, 275 33 1 8 159 53 8 64 47 161 241, 300 137 72, 122 203 108 3 ERRATA. GOLD AND SILVER COMMISSION. TiNAL Report, p. 115. In section 18 of Sir Louis Mallet's Note — line 10, for "these" read "other." line 11, /or "no fall" read " a fall." 54648. MINUTES OF EVIDENCE TAKEN BEFORE THE ROYAL COMMISSION ON GOLD AND SILVER. FORTY-THIRD DAY. 8, Richmond Terrace, Whitehall, S.W. Monday, 19th December 1887. Mr. D. M. Baisbodr, C.S.I. Me. J. W. Birch. Mr. Hbnryt Chaplin, M.P. PRESENT : The Right Hex. LORD PIERSCHELL, the Chairman, presiding. Sir T. H. Faerer, Bart. Me. C. W. Fremantle, C.B. Mr. S. Montagu, M.P., and Mr. Geo. H. Murray, Secretary. Mr. Aleked Marshall examined. 9623. {Chairman?) You are Professor of Political Economy in the University of Cambridge ? — Yes. 9624. And you have given some consideration to the questions vyith which this Commission has to deal ? — Yes. 9625. I believe you wish first to make an observa- tion as to the term, appreciation of gold ? — Yes. I want to explain how I use the term myself, rather than raise controversial questions on a matter on which controversies are very long indeed. I myself should prefer to adhere to the old usage, which is, I think, almost universal amongst academic economists, in which the appreciation of gold simply means a fall of general prices ; I prefer not to make any distinc- tion between the two terms. But there is no doubt that the two are used in different senses among the public, and I liave tried to ascertnin what it was that was meant when the appreciation of gold was con- trasted with a fall in general prices. In reading the evidence that has been given before this Commission, I have found myself often unable to follow what was said, because I could not make out how the word was used, when an appreciation of gold was contrasted with a fall of general (gold) prices. Therefore, in order to make my own position clear, I would like to say that when it is so contrasted, and used as denoting a rise in the real value of gold, I then regard it as measured by the diminution in the power which gold has of purchasing labour of all kinds — that is, not only manual labour, but the labour of business men and all others engaged in industry of any kind. To give definiteness to this explanation I will take an example. Suppose that the rise in the purchasing power of gold, as measured by the general prices of commodities, is 30 per cent. ; suppose the rise in the power which gold has of purchasing work, or, in other words, the fall in average gold earnings, is 12 per cent. ; then, in my use of the term, the fall of prices is o 54648. Wt. G586. due to the extent of 18 per cent, to improvements in production, and to the extent of 12 per cent., to a rise in real value or to an appreciation of gold, in that use of the term in which it is contrasted with a fall of general prices. As regards the depreciation of silver I am rather puzzled by the statement in the Warrant appointing the Commission, that it is to inquire into the depreciation of silver. I do not admit that silver has depreciated in the sense of having less general purchasing power. I think that it has appreciated and has now ,i higher purchasing power as regard'^ commodities than it had before. I think that the fall in the gold price of silver is greater than the fall in the gold price of labour, and that therefore there is a depreciation of silver, iu the sense in which it means a fall in the power which silver has of purchasino- work, but not in the sense in which the depreciation of silver means a fall in its general purchasing power 9626. Depreciation of silver, I think, has been generally used in the evidence before this Commission as equivalent to a depreciation in its gold value or price. Of course you do not dispute that there has been a depreciation of silver in that sense ?— No only I cannot see how we are to get on if we do use it in that sense, because then the depreciation of silver I thmk, ought to correspond with the appreciation of gold, and It has seemed to me that there has been occasionally some talking at cro^s purposes, because in one part of an argument depreciation of silver has been taken to mean merely a fall in its value relatively to gold, and in another has been taken to mean either a tall in its power of purchasing commodities, or a fall in Its real value. 9627. Supposing that any commodity, other than silver, doubled its supply, the demand being in no way increased, and the price was consequently lowered, would not you say that there was a depreciation in the value of that article .'—That would depend on the A Mr. A. Marshiill. 19 Dec. iBfT. EOYAL COMMISSION ON GOLD AND SILVER: Mr. A. Mamshdl. 19 Dec. 1887. context, and if the context was such as to introduce the phrase, the appreciation of gold, I should object to using the term depreciation in a sense which had no logical connexion with the adjoining use of the term appreciation. 9628. In that case you would not say there was an appreciation of gold. If it was the case, only of one single commodity, the price of which was halved by reason of increased supply, without increased demand, then would not the proper phrase be that there was a depreciation in the value or price of the article, with- out any appreciation in the value of gold, meaning, in the value of gold generally ? — I should prefer to state a simple fact, that its price had fallen. I would rather do that than say that it had depreciated, if anywhere in the neighbourhood there was the phrase, the appreciation of gold in an altogether different sense. 9629. To pass now to the question which has been raised of the dependence of prices upon the quantity of the currency, what observations have you to make ? — I accept the common doctrine that prices generally rise, other things being equal, in proportion to the volume of the metals which are used as currency. I think that changes in the other things which are taken as equal are very often, perhaps generally, more important than the changes in the volumes of the precious metals. A question was asked by the Com- mission some time ago as to the dependence of prices upon the amount of the precious metal which was used as the standard of value. I object to make any such distinction. I beheve that the shilUngs and half- crowns in circulation have just the same effect upon prices as they would have if they were legal tender ; I believe that four half-crowns affect prices exactly in the same way as a half sovereign does. But putting that aside, 1 think that we have not the statistics, and that we shall not, in this generation, be able to get the statistics which would enable us to trace any statistical connexion between the amount of the precious metals, or, as I would prefer to say, between the amount of currency and the average level of prices ; because, supposing that the volume of the currency remains the same, the height of average prices may yet vary in consequence of several causes. The first of these is a change in the volume of things on sale, and with regard to that no doubt we have fairly good statistics. The second is an increase or diminution in the average number of times each of these things changes hands during the year, and with regard to that we have no statistics whatever ; indeed, there has never been any attempt to obtain statistics on the subject. The third cause is the average number of times that each coin or each element of the currency changes hands during the year ; on that subject also there are no statistics. The last cause is the proportion which purchases otherwise than by currency bear to pur- chases by means of currency ; on that subject I think we have no statistics which are in the least trust- worthy, altliough, of course, a great many people have given guesses of more or less value. It seems to me that it is an insufficient account to say that average prices depend on the amount of the currency combined with the amount of credit. For without any change in the amount of the currency the average level of prices might be altered, not only by a change in the proportion of credit to other means of purchasing, but also by any other change in the methods of business, as for instance the growth of intermediaries. 9630. In what sense do you use the word currency when you speak of dependence of prices on the quan- tity of the currency ? — I do not think that that doctrine depends very much on the question vi^here the line is drawn. I believe that you can make the theory valid with almost any definition of currency, provided, when you have once adopted it, you adhere to it throughout ; but I, myself, use the term currency to include every- thing which passes from hand to hand as a means of purchasing, without requiring any special or trade knowledge on the part of those who handle it. 9631. Then you do not limit it to either gold or silver, or gold and silver ? — No, I include paper money. 9632. And not only bank notes, but cheques ? — No, because a cheque requires the receiver to have formed some opinion for himself as to the individual from which he receives it. If a stranger offers me a 5/. note, I am willing to give him five sovereigns for it, if I feel sure it is a genuine note ; but if he offers me a cheque, I will not give him anything for that, unless I happen to have special knowledge of the person who offers it. 9633. Supposing that without any change in the amount of credit which people had at their bankers, the amount of gold and silver which existed in the country were diminished tomorrow, why should prices be lower or higher? — Because, in my opinion, if a change were made suddenly and in the ordinary way, it would then affect at once Lombard Street 9634. Assume that it so takes place, as not to affect or shake credit in any way ; that people believe that they can as safely draw their cheques, and as safely leave their money at their bankers as they could before. In that case, why should a diminution of the reserve kept by the bankers, if it does not suffice to shake credit, affect prices ? — I do not think it would affect prices instantaneously. If you could suppose a diminution in the number of coins in every purse and in every shopkeeper's till and counting-house, that would act on prices directly ; but even that might not act suddenly, although the whole structure of our business is based upon retail transactions. I think that the amount of coins which a person cares to keep in his pocket is determined by the amount of business he has to do, and by the proportion in which that part of his payments which he finds it most convenient to make in currency bear to the whole. 9635. But is not the greater part of the metal which we possess, gold, in the form of bullion at the Bank of England, and not of coins in peoples' pockets at all ? — In England, surely not. In England, surely the amount of gold in peoples' pockets is very much larger. 9636. True. Perhaps I should have said, the varia- tion is rather in the amount in the reserve of the Bank of England and other banking reserves, than the amount of coin ? — Yes ; and therefore, when you ask me what would be the effect of the diminution of'« the amount of coin, I think of it as affecting the Bank of England reserve and the rate of discount. 9637. But did you include bullion reserves as well as money coined and in the hands of the public ? — When I spoke of its effect on Lombard Street I cer- tainly had in view its effect upon bullion as well as upon gold coined and in the hands of the people. When I spoke of the effect of a decrease in the supply of gold on prices as acting thi-ough Lombard Street, I then had in view bullion as well as coin. 9638. Do you think that the amount which people have at their credit at their bankers is an important factor in determining prices ? — Very ; but 1 think that the treatment of the problem from that point of view raises a different set of questions. The relation which the amount of bankers' money bears to the amount of currency has to be discussed as a part of a larger inquiry as to the influence which is exerted on prices by the methods of business; and, as I have already said, I do not think we are yet ready to deal with that statistically. It has not yet been thoroughly investigated by economists in any country. The most pregnant hints on it are, I think, those given by Mr. Giffen in his " Stock Exchange Securities." I do not think that his solution is complete, but he seems to have pointed towards the right solution. I am afraid rather of getting lost in a great maze of reasoning of a very abstract character if I go into the matter; and I would desire at present to confine myself to indicating in a very general way the manner in which I should approach it. I should consider what part of its deposits a bank could lend, and then I MINUTES OF EVIDENCE. should consider what part of its loans would be re- deposited with it and with other banks, and, vice versd, what part of the loans made by other banks would be received by it as deposits. Thus I should get a geometrical progression ; the effect being that if each bank could lend two-thirds of its deposits, the total amount of loaning power got by the banks would amount to three times what it otherwise would be. If it could lend four-fifths, it will then be five times ; and so on. The question how large a part of its deposits a bank can lend depends in a great measure on the extent on which the different banks directly or indirectly pool their reserves. But this reasoning, I think, has never been worked out in public, and it is very complex, and I should not wish to tender evidence upon the subject. 9639. But I want to understand why an alteration in the amoimt of gold in this country, whether in coin or in bullion reserve, should have a considerable effect upon prices. In considering what affects prices, I should be disposed to accept what you put, that the amount of balance which men have at their bankers must have a very potent effect. What I do not quite understand is. why that effect should be less or greater because of the amount of reserve which the banker holds to support the credit of his establishment. If the credit is fully established, why should it add to prices if he doubled the amount of gold that he kept, or why should it diminish prices if he halved it? — Oh, certainly ; I do not think that prices are affected by any accumulation of reserves, such as the Bank of France, for instance, may hold: that is, in excess of what is really wanted for the purpose of establishing its credit. 9640. Supposing that this country had more gold to-morrow than it has to-day, would not that increase show itself only in bankers' reserves or in the reserve of the Bank of England, and not in the pockets or hands of the people ? — How does the gold come ? Does it come in the ordinary way through the bullion dealers ? 9641. Yes; suppose any assumption you please? — Then I should say it would act at once upon Lombard Street, and make people inclined to lend more ; it would swell deposits and book credits, and so enable people to increase their speculation with borrowed capital ; it would, therefore, increase the demand for commo- dities and so raise prices. 9642. That is to say, by making money cheap, and so fostering speculation, and by facilitating speculation, increasing prices ? — Tes, supposing gold to come in the ordinary way through Lombard Street. 9643. But that would not be because it added very much to the volume of the currency, but it would be the indirect effect of making loanable money cheap ? That would be only its immediate effect, but it would have the ultimate effect of adding to the volume of the currency required for circulation, as I think ; because, prices having risen, a person who had found it answer his purpose to have on the average 17/. in currency in his pocket, would now require ] 8/. or 191. ; and so on for others. 9644. But do you think it would alter in the least the amount of currency which people had in their pockets. Is not the tendency more and more to leave all the nnmey at the bankers and merely to keep what you want for small change in your pocket — on the part of tradespeople ? — Oh, undoubtedly ; that is the reason wliy we have been able to sustain prices, althouo'h business has increased at such a,n enormous rate ; changes in the methods of business are certainly diminishing the amount of currency we require to do a given amount of business. But except in so far as the methods of business change, a rise of prices requires people to use more currency for retail trans- actions, and, other things being equal, an increase in the amount of the precious metals seems to me to raise proportionately the uses of them for all pur- poses. 9645. One more question to illustrate what I want to get from you. Supposing that the balance which people had at tlieir bankers was doubled, would not that be likely to have a greater effect upon prices than adding merely a large amount, which would be by no means anything like as large, to the metal in the country ? — I do not see how the balance could be increased, the amount of precious metals remaining stationary, unless there was a change in the methods of business; and a sufficient change in the methods of business would enable prices to be 10 times as high as they are with the same amount of gold and silver. 9646. But why do you say that; have you any information which would lead to the conclusion that the state of things to-day is not that of very large increase in credits at the banks of the country, with no increase at all practically in the amount of coin in circulation or bullion reserves in the banks and in the Bank of England ? — I think what you say is quite correct, but I submit that that is due to a gi-adual change in the methods of business, and my belief is that it has been this gradual change in the methods of busi- ness which has enabled us to do some 20 or 30 times as much business as we did before with a volume of gold and silver only two or three times as large as we had before, and if that change should go on fast I believe that prices would rise. 9647. Yon mean without any addition to the currency ? — Without any addition. I believe — and in this I think I am supported by the Austrian econo- mist Dr. Wirth, who wrote a very important book on crises — that the rise of prices before 1873 was to some extent in consequence of the tendency to the use of bank credits in Austria. There is no doubt that at that time Austria did go rather bank-mad, and after 1873 it became clear that the hopes that people had of the speedy adoption of the English banking system in Austria were destined to be disappointed. The movement was premature, and I have always thought that to be one of the important causes of the fall in prices which happened in 1873. 9648. Then I gather that your expression, all other things being equal, covers so much ground, is so extensive a qualification of the statement of your general rule that prices depend on the quantity of the currency, that you would agree that there might be a sensible increase or diminution of the quantity of the currency without a sensible increase or diminution necessarily following in prices ? — Yes. As Voltaire said, an incantation will destroy a flock of sheep if it is accompanied by a sufficient dose of arsenic. So a great rise of prices is possible without a change in the supplies of gold and silver, provided there is a sufficient change in the methods of business. And, as I have already said, we have no statistics of changes as to the methods of business ; a great number of the statistics which we ought to have in order to get near a statistical treatment, have not even yet begun to be sought for, and therefore I myself despair of arriving by the direct statistical method at any decision of the question whether there is a scarcity of gold. The only direct statistical method or semi-direct statistical method that I can think of is to find out what is the change in the purchasing power of gold in terms of labour of all kinds. 9649. You gave one illustration of the method in which you thought the addition to the metallic currency might affect prices, namely, the indirect effect produced by its increase of loanable capital by lowering the rate of discount, and so enabling men to borrow more cheaply and readily, and so stimulating speculation. Have you any other suggestion to make as to the mode in which the increase or diminution of the supply of the metal affects prices ? — I take the question to refer to a country such as England now ? 9650. Yes ? — I think that if there was more gold in circulation than people wanted to do that part of their business which they prefer to do with currency, they would simply send it to the banks. From the banks it would go into the reserve ; from the reserve it would go back on to the general market, inflating credit, increasing speculation, enabling people to borrow who could not borrow before, raising prices. A 2 Mr. A. Manhall. 19 r-nc. 1887. ROYAL COMMISSION ON GOLD AND SILVEK ; Mr. A. Marshall. 9 Dec. J 887. When prices had once been raised, say, 10 per cent, all round, then supposing there to be no dose of arsenic with the incantation, and the habits of business to be exactly the same as before ; then people would require 10 per cent, more cash in their pockets than they did before. 9651. The evidence that has been put by some witnesses before us has been intended to show that so far from any connexion being traceable between ])lentiful money and a low rate of discount and a plentiful supply of the precious metals, the evidence was just the other way ? — Oh yes, that is certainly true as regards permanent results ; the supply of gold exercises no permanent influence over the rate of discount. The average rate oi discount permanently is determined by the profitableness of business. All that the influx of gold does is to make a sort of ripple on the surface of the water. The average rate of discount is determined by the average level of interest in my opinion, and that is determined exclusively by the profitableness of business, gold and silver merely acting as counters with regard to it. 9652. The next point to which you propose to direct our attention is the conditions under which bimetallism would raise prices ? — I do not think that there is any evidence that bimetallism — that is the use of the two metals instead of one — in every country in the world would raise prices all the world over directly ; that is not in gold countries and silvar prices taken together. Indirectly it might, but directly I do not think it would, because I think that all the gold and silver in the world that is not wanted for the arts or production or hoarding is already acting as currency, and I do not think its efiiciency would be increased by the adoption of bimetallism. If bi- metallism caused larger supplies to be raised from the mines that would affect prices ; if it cau.sed less to be hoarded that would aflfect prices ; if it led to a silver paper being issued upon a thin reserve of silver, that would inflate prices : but by itself I do not see that it would affect the average of prices all the world over. If, however, bimetallism took the par- ticular form of fixing the value of silver, say 20 per cent, higher than its market value now, I should then expect it to raise prices some 10 per cent, or perhaps a little less in gold countries, and to lower ^.hem some 10 per cent., or perhaps a little more in silver countries, leaving the average all the world over very much as it was before. As regards the future I do not think that it would in the least tend to diminish the difRculties of increasing our supplj' of the precious metals. Mr. Giifen has put this pro- minently forward, and it has not, I think, been answered. Excc):t in so far as it is likely that silver would be more easily mined than gold in the future, bimetallism would not make it easier to increase our currency in proportion to our increase of business than it is novy. It would be just as hard to add 10 per cent, to each of the two metals as to add 10 per cent, to gold alone. 9653. I should like to ask one question upon your statement as to the effect of bimetallism if the gold value of silver were raised 20 per cent, higher than it is at present. You say that it would raise prices something like 10 per cent, in gold-using countries ; do you mean all prices ? — Yes ; I see no reason for one price being affected more than another. 9654. You do not make any distinction between the price of articles that are the produce of silver-using countries and other articles which have no special connexion with them ? — Well, of course, the immediate eflfect of the fall might be to cause a flow of silver from one country to another, and the flow of silver from one country to another will of course affect the exchanges between that country and others : but I do not think that effect would be very great. 9655. Why do you think that to fix the ratio between gold and silver 20 per cent, higher as regards the value of silver than it is at ■ present would raise gold prices in this country 10 per cent.; how, I mean, would it operate to have that effect ? — I think that we should certainly use more silver. It is difficult to answer the question without some assumption as regards silver paper. I believe that Englishmen would strike against any law that compel- led them to carry about a pound's weight of silver, and unless silver paper of some form were allowed, I believe that the Government would not have the power of carrying out a bimetallic law : I believe that a law making 15^ ounces of silver legal tender as an alter- native for an ounce of gold, involves as a necessary consequence (in the present condition of our gold and silver supplies) an issue of paper based upon silver in some form or another. On this assumption I think there would be an addition to our currency, and that would raise prices. 9656. But how would that come about ? Of course the Government would not issue the paper against the silver or the bank, or anybody, except some demand were made. You mean people would bring silver to be minted and then issue paper against it ?— Y'"es. 9657. Well, then, supposing that that were so — supposing 10,000,000/. of silver were brought to be minted, and silver certificates or notes were issued against this 10,000,000/. of silver or 20,000,000/. of silver, why should that raise all prices 10 per cent. ? — I think we should contemplate one change at a time. Assuming the habits of business to remain unchanged, the amoimt of coin which a person finds it convenient to carry about, taking one with another, depends upon his general wealth. A shopkeeper with an income of 1,000/. a year would be likely to use a great deal more gold than an architect with the same income, but if prices rose generally so that the money income of each increased 10 per cent., and the expenditure of each in every direction increased also 10 per cent., then (their habits of business remaining unchanged) each of them would, I believe, keep 10 per cent, more money in his purse. In the first place, this bullion would probably go through the money market; it would enable Jpeople, as I have said before, to borrow who otherwise could not have borrowed. There would be therefore a flutter of prices upwards and that flutter would be sustained, because of there being this largei' amount of silver to be had people would have the means of keeping a larger quantity in their purses. 9658. This is V. hat puzzles me ; why does anybody want to keep more currency in his purse ; why should not people be without any currency in their purses ? Will you let me put a further quetition in order to point out my diflSculty ? The silver that came here would not come here without something going in return. The silver that finds its way here must be here in the shape of a credit that somebody obtains as against something that he has given for it ? — Yes. 9659. Weil then, upon the basis of that he gets, we will say, notes. So far as he, by reason of that, has more money to spend, or that the people who bring it here have more money to spend than before, they will be people coming into the market as purchasers, and therefore tending to raise prices. That I understand, hut apart from that fact, I do not quite understand why adding to the volume of the currency — why, because it is represented by notes I'ather than by simply a credit against which people may draw — it should have any effect upon prices ? — I do not say that I think the amount of currency one wants depends entirely upon the level of prices. It depends chiefly on one's habits. But the habits remaining the same, it depends on the level of prices. I have watched that with regard to myself when travelling in different countries. I used to spend something like 15/. a month when travelling in the cheaper parts of Germany. When I went to America I calculated to spend and I did spend exactly four times that amount. No doubt I travelled over larger distances then, but I wanted to carry three times as much money in my pocket to pay my way at American hotels as at German country inns. I admit that the tendency is for all well-to-do people to keep less cash about them, and in fact when a person is living at home he very MINUTES OF EV! DUNCE. likely may hardly handle any money at all ; but when he travels he has to calculate what his expenses will be, and he generally calculates it vei y closely, so as not to burden himself with superfluous each. "Well, the common people have no bank accounts, and we must recollect that witji regard to numbers, it is common people that count and not the well-to-do people. The working and lower middle classes are getting wealthier, and they are able to have more money in their pockets. I have noticed a good deal of evidence to the effect that "the people" do not carry about with them as much coin as they used to. Those who do not are the upper million, or perhaps the upper three million, but the remainder make almost all then- purchases with gold and silver. 9660. But then how would people get more of this currency notes, or whatever it is in their pockets, unless prices had first gone up and they were richer and could have more in their pockets, because I do not know that anybody has experienced a want of getting money who has anything to give in return lor it ? — No, but my view is that if the extra silver goes to the banks in the ordinary way, its first effect will be to cause a flutter of speculation and that will raise prices, and prices being higher people will find that they have to keep more about them in order to pay their way. 9661. Ah, that I understand. Then you come to the greater volume of currency as the result arising from the increase, owing to prices having previously become higher ; but the higher prices do not result from the greater volume of the currency ? — The ulti- mate cause is, in my opinion, the increase of currency. 1 think that, the habits of business being unchanged, a rise of prices requires an increase of the coin in people's pockets to sustain it. But I have been pressed to explain the process by wl'ich I think that an influx of silver coming in, in the way in which in our modern civilisation it would come in, through the banks, would find its way into people's pockets. And what I say with regard to the rate of discount is intended to account, not for the permanent rise of prices, but for those larger supplies of currency in the pockets of the people who sustain the prices per- manently. If a postman could go round and distribute to everybody the increased currency straight off, then I think that would in a primitive state of society act upon prices directly. 9662. Then that comes really back to the point that you put before, that the way in which the prices are affected is that increased bullion lowers the rate of discount, promotes speculation, and so raises prices, and then the result of that is that prices being raised people will need more currency to carry on their transactions. Does that properly represent your view ?— Yes, when I say lowering the rate of dis- count, I do not mean anything more than a flutter downwards. I conceive the average rate of discount during the last 10 years has had nothing to do with the supply of precious metals, except in so far as the fear of a further fall of prices has deterred people from new enterprises. If the supply of the precious metals had been twice larger, then the average rate of discount would not have been affected considerably. 9663. {Mr. Barbour.) You think the average rate of discount would not have been lowered if the supply had been twice as great as it actually has been ? — No, would not have been lowered. 9664. Do you think it might have been higher in the case supposed ? — I do not think it would have been affected either way considerably. 9665. {Chairman.) When you say bimetallism at that ratio would have that effect upon prices, it is merely a temporary effect which any addition to the bullion in the bank causing a flutter of the discount rate and so a flutter by speculation ? — No, my view is that the flutter would affect the speculation, but the prices once having been raised, and there being a larger volume of currency to sustain higher prices, higher prices would be sustained. 9666. But is not the general effect of lowering the rate of discount in that way owing to an increase of the bullion — to send bullion out of the country ? — Oh, I thought we were discussing the effects of adding a good deal of silver coin, or silver paper, to the currency of all gold-using countries. 9667. You mean there would be an increase in all countries in bullion ? — In all gold countries. 9668. {3Ir. Birch.) That is supposing that the production from the mines increases? — No. I am supposing that silver is made legal tender at 1.5^, and in consequence we get a good deal of silver from silver countries. 9669. (Chairman.) Yes, but in France it is still IqJ;, the ratio at which it is legal tender ? — Nomi- nally. 9670. Then it would become so, if you please, really ; but why should that silver come from them to us ? — I do not say it would come to us from them. 9671. Why should it come from America to us ? — I do not see whcL-e it would come from other than from growing production of the mines? — I think it would come from India. 9072. (Mr. Barbour.) India might import less ? — I think India might import less, we should stop it on the way from the mines. 9673. {Mr. Birch.) Surelv the silver that came would only replace the gold ; the amount of metal in the country would be the same ? — I think that the silver would be added to the gold. I think that some silver would come to England. The fundamental or original cause of the change of prices would be our using a dif- ferent counter. Whereas now we use a counter of a sovereign we should then use a counter of a half a sove- reign and a half of four-fifths of a sovereign. On this supposition it would have just the same effect in my view as if we were to decide to cut off a tenth part from all our sovereigns, and, indeed, I must say that many of the arguments in favour of a change of our currency seems to me to point to that. That is a much simpler and more efficient way of doing Vvhat is wanted by those advocates of bimetallism, who desire it chiefly because they believe it would raise prices. Their real purpose would be made more clear if they would openly propose that since a smaller sovereign would now be worth as much as a larger sovereign used to be, we ought to have a smaller sovereign. I do not say that this criticism applies to all arguments in favour of bimetallism, but it does apply to some. 9674. {Chairman.) That would not touch the argu- ments arising from the inconvenience of the altering relatioa of the value of gold and silver as between gold- using and silver-using countries ? — No, of course not, but I would like to take this opportunity of pointing out the immense diflficulty of predicting anything as to the future use of gold and silver respectively in different countries. It is commonly said that poor districts would not be likely to use much gold. That may be so, but there is no certainty about it. The use of gold seems to depend on habits which are not easily traced, and, measured statistically, but which are, perhaps, closely connected in some parts of the world with the hoarding of gold. For instance, more than 80 per cent, of the value of the coins in circulation in some of the poorest parts of France consists of gold, while in some of the richer districts the value of the gold in circulation is less than that of the silver. Here is a map which shows the proportionate value of land in diflerent departments of France ; that which is shaded most darkly being that which is most valuable. (See La France Economique by A. de Foville, p. 311.) Here (p. 68) is another map which shows the use of silver ; that which is shaded most darkly is that in which there is the largest proportion of silver, and there is no connexion between those two maps. Of course, some departments in which the value of agricultural land is low have a rich urban or manufacturing population. But the case is not altered much when allowance is made for this. Mr. A. 3Jar shall. 13 l")ec. 1887. EOYAL COMMISSION ON GOLD AnA SILVER ; Mr. A. Marshall. 19 Dec. 1887. 9675. Reverting to the question of the effect of a quantity of silver coming in the way you have suggested, from the banks, and so affecting the rate of discount, do you think it necessarily follows that that would promote an amount of specu- lation, owing to cheapness of money, that would affect prices?. Would not that depend a great deal upon other considerations, such as whether trade was likely to be protititble, or whether the supply was out- stripping the demand in most branches of trade ? — Oh, certainly. I think that the supply of the precious metals is only one of the many causes which govern prices ; and if any other changes should take place at the same time, 1 think it is likely that they would throw into the shade the effect of the change in the supply of the precious metals ; but, other things being equal, I can see no reason for doubting that the pro- portion of business in general to the business done with gold and silver in any country would be affected by an increase in the supply of the precious metals. 9676. But what I was rather thinking of was this. During the last year or two we have had times when money has come down very low indeed, as low as it would be likely to do, perhaps, from the present rate, if there were a considerable addition to the metal by making silver a part of the currency of the country in the way suggested. I am not sure that it is at all shown that that fall in the rate of discount has tended to stimulate speculation and raise prices. Prices seem, in spite of that, to have been falling, and I am not sure that I can tell why, because the rate at which people can get money is produced by some different kind of change — monetary change — ■ if the effect produced is the same, namely, a fall in the rate of discount ; why that should any more stimulate specu- lation and raise prices ? — I do not myself put the rate of discount into the first place ; my own way of looking at it was rather to lay stress upon the actual amount of money in the market to be loaned. 9677. Yes. Well, I put it in that way; but the amount of money in the market to be loaned has a good deal of connexion with the rate at which it is loaned. If there is much to be loaned, the price at which you can get it is cheaper ? — Yes ; but I think that the direct effect is that of the amount of money itself. If there is an extra supply of bullion, bankers and others are able to offer easy terms to people in business, including the bill brokers, and consequently there is more money on loan, and consequently people enter into the market as buyers of things, as starting new businesses, new factories, new railways, and so on. 9678. Yes, but what I was putting to you was that there seems to have been that abundance of loanable capital in the money market — such an amount as people are hardly able to get rid of at any price, if I may say so — for two years, and we have no evidence that that has stimulated speculation and raised prices, but we have evidence of a fall of prices in spite of that ? — Yes, but that is what I should have expected. It seems to me that the great economic feature of this age, more important than every other fact put together, is that the amount of capital is increasing many times as fast as that of population. It is increasing faster than ever in England, and, what is much more important, there is a very rapid increase iu America, where everybody almost is saving. The "extravagant" American is saving more than any other person. In spite of all the inventions which are continually making new uses for capital in the form of machinery and in other ways, this vast increase forces down the interest that can be got in business. The rate of discount, in my opinion, is merely the ripple of a wave on the surface, the average level is the rate of interest which can be got for the invest- ment of capital, and this is being lowered by the rapid and steady growth of capital— I do not mean the growth of credit, .mean the growth of things, the actual excess of production over consumption. I do not see any necessity at all why interest should be rnore than 2 per cent, a century hence. I should not be at all surprised if a railway company could borrow on debentures at 2, or even less than 2, per cent, in the next century. 9679. Yes, but why, if the ripple produced by increase of loanable capital, or whatever it may be, during the last two yeai's has been as great a ripple as would be likely to be produced by a considerable addition of silver to our stock of metallic currency, why should the latter stimulate speculation where the former did not. What I mean is, let us assume that the introduction of this metallic currency would bring into the market 20,000,000/'. to be loaned, and that the effect of that would be that bankers would be willing to lend at 1^ per cent, instead of 2^, at which the rate stood before, why should that drop of 1 per cent, necessarily stimulate speculation and raise prices when we have had experience of several years that an abundance of loanable capital in the money market has not stimulated speculation and raised prices ? — Because of the cause by which it has been produced. It would be produced by a large excess of loanable capital. This 20,000,000/". of extra bullion would be multiplied, I think, in the loan market, and become the basis of credit which supplied the power of purchasing real capital, that is bricks, iron, wool, &c., to the extent of much more than 20,000,000/. This would have a considerable effect in fluttering prices upwards, and when once fluttered upwards they would be held up by the fact that there was currency to sustain the higher prices. 9680. {Mr. Birch.) Are you conversant with the rate of discount during the last two years in Lombard Street and the available capital seeking employment in discount ? — I know there has been a great plethora of capital. I believe that the plethora of capital is likely, in all ordinary times, to increase ; and of course there is a special reason why people should be un- willing to borrow now, because they have lost so much by borrowing and investing in things of which the prices have fallen. 9681. And the rate of discount, are you aware what it is ? — I am aware it is extremely low. 9682. I understand you to say that the low rate of discount and the large amount of available money to discount bills, and so give activity to commerce, was likely to raise prices ? — I cannot accept the substitu- tion of a change in the rate of discount for a change in the amount of capital in the hands of speculative investors. I must go back to the cause of the fall in the rate of discount. If a fall in the rate of discount is produced by the overcrowding of the field for investment it might not have that effect; but if it arises from an increase in the amount of capital which is in the possession of those who supply loans I think it will make it easier to float new companies. 9683. {Chairman.) But I thought you said that there had been nothing so remarkable of late years as the increase of this loanable capital which has been going on from year to year ? — Yes. 9684. And yet it seems to have been attended with the very reverse of what you anticipate, namely, limited speculation and a low rate of prices ? — That is because, in my opinion, the permanent rate of dis- count has no connexion with the amount of currency. The centre about which discount fluctuates in my opinion is determined by the profitableness of business. 9685. My question had no relation to the rate of discount at all, but what you were suggesting was that the regulating consideration was the amount of loanable capital? — Yes. 9686. And if the amount of loanable capital has been increasing year by year why should not that, inasmuch a^ each year's addition was added to what went before, why should not that have stimulated speculation and raised prices instead of, as we have seen, prices languishing? — My position is that the mean rate of discount is governed by the mean rate of interest for long loans ; that again is determined by the extent and the richness of the field for the invest- ment of capital on the one hand, and on the other by MINUTES OF EVIDENCE. the; umount of capital seeking investment. The amount of capital has been increasing so fast that, in spite of a great widening of the field of investment, it has forced down the rjte of discount. The fall in the rate of discount so caused failed to stimulate speculation, because it was itself caused by the difficulty of finding good openings for speculative in- vestment ; this ditficulty being in part due to the fear that prices would go on falling. Equilibrium is found at that rate of interest for long loans (and the corresponding rate of discount for short loans) which equates supply and demand. But next, this equi- librium being established, we set ourselves to inquire what will be the result of a new disturbance, viz., the influx of a good deal of bullion into the city. This does not increase the amount of capital, in the strictest sense of the word ; it does not increase the amount of building materials, machinery, &c., but it does increase the amount of command over capital which is in the hands of those whose business it is to lend to speculative enterprise. Having this extra supply, lenders lower still more the rate which they charge for loans, and they keep on lowering it till a point is reached at which the demand will carry off' the larger supply. When this has been done there is more capital in the hands of speculative investors, who come on the markets for goods as buyers, and so raise prices. Further, it must be remembered that the influx of bullion would have caused people mean- while to expect a rise of prices, and, therefore, to be more inclined to borrow for speculative investments. Thus it might not be necessary to lower the rate of discount very much. The increased demand would meet the increased supply half way, and, after a time, might outrun it, causing a rise in the rate of discount. But as this rise would be merely an incident in a series of changes which put more command over capital in the hands of speculative investors, it would go with an increased demand for goods and a con- tinued rise of prices. This then is my account of the way in which this extra supply of the firecious metals would bring prices up. Having been raised they would be sustained because the methods of business remaining stationary, if a man with an income of 1,000/. keeps on the average 12/. in his pocket, and if there is more currency in the country so that his share is increased from 12/. to 14/. ; then what was bought by 12/. would in future be bought by 14/. ; the higher prices are sustained by the fact that the amount of cash which a person cares to keep depends upon the habits of business in his par- ticular rank of life, together with his individual peculiarities; if they are not changed any increase in the amount of currency which falls to his share will raise proportionately prices so far as he is con- cerned. 9687. You have suggested that it would be erroneous to consider that the volume of currency was chiefly in the hands of people who would have no banking accounts, and that one ought to regard more the mass of the people who would have no banking accounts ? — I think that the demand for coin is chiefly the demand from the lower 70 or SO per cent, of the population. 9688. Yes, but do not those classes very soon after they get the money pay it away to people who generally have a banking account, so that all that would happen would be that they may possess it for a day or two, or three days, but that within the course of a week it will have found its way to someone having a banking account, and they may have the same money given up to them the next week ? — That is true, no doubt, of a very large part of the population. Were it not so I think we should require two or three times as much gold as we do. 9689. (Sir T. Farrer.) And is not that a process which is developing 'i — I am not sure whether it is going on very fast just now. I spoke just now about our want of statistics. Of course the co-operative movement and the habit of paying cash, even when dealing with shopkeepers, does tend to cause the workuig man to keep cash by him a little longer, though I admit he has still a habit of emptying his pockets in a very short time after he receives the money. 9690. (Mr. Barbour.) I suppose you would admit that there must be a certain relation between prices in England and prices in the other countries with which England is in commercial connexion ? — Cer- tainly. 9691. So that if prices were raised in England there must be, other tilings being equal, a rise in the prices in other countries too ? — Unless there is a change in the counters in which they are estimated. I mean that if 15^ oz. of silver were made legal tender in payment of a debt of 1 oz. of gold, prices might rise in what had been gold-ujing countries, while falling in what had been silver-using countribs. 9692. Assuming England is in commercial relation with another country having a gold standard, and prices rise in England, say from speculation, or credit, or a change in the mode of business, and that there is no increase in the precious metals, even in that case prices must rise in the other country too.? — Yes. 9693. Now if that other country was one which depended very much on gold, prices could not lise there without an increase of gold, though they miglit rise in England from an increase in speculation and credit. England, we will say, uses credit largely ; the other country simply uses gold, but the prices in the two countries must bear a certain relation to each other, because they have commercial intercourse; and though prices in England could rise owing to an extension of credit, they could not rise in the other country without an increase in gold ? — I am not sure whether this is a new question or a development. 9694. It is a development of what went before; you said prices could not rise in this country unless there was an additional supply of gold, or an increase of credit, or a change in the mode of doing business ; and I want to bring in a further point that if there is another country in commercial relationship with England which utes gold, it is the want of gold in that country which may check the rise of gold prices in England, and not the want of gold in England ? — Yes, I quite admit that the level of prices in terms of gold must be determined all the world over ; that is, with regard to all gold-using countries. 9695. And that the pressure of the want of gold might come in in any one or more of those countiies .■' — Certainly. 9696. {The Chairman.) I pass now to the question with which you are also prepared to deal, how far bimetallism would steady prices ? — -What 1 said before as to the importance of watching changes in the methods of business at least as carefully as changes in the supplies of the precious metals, had for its object to lead up to this, that I do not consider that the main causes of fluctuations of prices have been fluctuations in the supplies of the precious metals. I believe that changes in the methods of business and the amounts of the commodities, or, as we may say, changes in the commercial environment, have much greater effects in disturbing prices than changes in these supplies of the precious metals. With that in view I have prepared a diagram showing the fluctua- tions in gold prices from the year 1782. Now, when we look at the changes in prices in recent years, we see that, great as they are, they are very much less than those in the early part of the century. Prices were almost halved between 1809 and 1816. That then is my first point, that during all this period when the supply of the precious metals was approximately constant, there were violent fluctuations of prices. Since 1848 the supfilies of the precious metals have fluctuated violently, but the fluctuations in prices have been less violent and not more violent. My second point relates to bimetallism, i want to consider whether it is true that the substitution of two precious metals for one as the basis of our currency would have had any great effect on steady- ing prices. Much light is thrown on this question by Mr. A. Marshall. 19 Dec. 1887. 8 KOTAL COMMISSION ON GOLD AND SILVER I Mr. A. Marshall. 19 Dec. 1887. the fact that these violent fluctuations took place at a time at which the gold prices of silver were approxi- mately stationary, when the prices were approximately bimetallic. It is not, however, true that the fjold price of sih'er was exactly stationary. I have found no means oi ascertaining what the gold price of silver was in England in early times. The only set of statis- tics that I have found is one given by Mr. Del Mar for the United States, and I think it is very likely that one change in particular, the great fall in 1816, may not have extended to the same extent to England. But on the supposition that Mr. Del Mar's figures are trustworthy, what I find is, that in so far as the silver price itself differed from the gold price, it was not more steady but less stEN0E. 45 10.187. "Well, supposo that at a time when prices were high, somethiiii^- occurred which brought about a scarcity of gold and an additional demand for gold, and at the same time another cause came into operation which lowered prices, jou would have simultaneously two sets of causes at work, one causing a scarcity of gold and the other lowering prices. Is it not possible under these circutiistauces that the scarcity of gold might not for the time being show itself in the reserve at all ? — Yes, I should not expect that any one cause when its action was combined with that of others would necessarily bring about the efl'ect which would naturally follow from it if its action were not so disturbed. 10.188. But these two sets of causes might act in the way I have supposed for the time being ? — Yes, quite so. 10.189. And prices having fallen in the ordinary course of trade and gold having become scarce for special reasons, when the time came in the ordinary course of trade for a rise in prices, the alteration in the supply of gold would tend to check that fluctuation upwards ? — Yes. 10.190. (Sir John Lubbock.) Eeferring to ques- tion 9314, with reference to the Bengal and North- Western Railway, which, it appears, pays 4 per cent., gained without a guarantee, but is at a con- siderable discount, whereas stocks with a gold guarantee of 4 per cent, are all at a premium. Putting aside the question of the gold, you would expect, would you not, that a railway which paid 4 per cent, on its own merits would hardly stand as well as another railway which, in addition to earning 4 per cent, on its own merits, had a Government guarantee ? — Not unless those who knew the railway had reason to believe that its dividend iu the future would be considerably above 4 per cent. 10.191. Ceteris paribus the additional guarantee would tend to raise stock higher ? — ^Yes, of course. 10.192. Then turning to question 9869 you said that we should be much better ofE if we had as many banks as Scotland. I suppose you mean bank offices ? — 1 mean if wo had as many banks and branches of banks in proportion to the population. I think I was not expressing my own opinion ; I think I was allud- ing to the opinion that others held, that it would add very much to the well-being of England if it had a great many more branch banks. I, myself, do not attribute so much importance to that as some others do. 10.193. But the point that I want to elicit is whether you mean bank offices or branch banks, because there are very few banks in Scotland, and a great many banks ia England ? — I mean bank offices in proportion to the population. 10.194. Then you went on to advocate the issue of IZ. notes because it would tend to increase the number of bank branches. But that would hardly be the case unless they were issued by the banks themselves. Do you mean allowing the Bank of England to issue 11. notes as against gold would have any tendency to increase the number of banks or bank offices in this country ? — I was throughout alluding to proposals that had been made by others. I do not know that I would care to give evidence upon it, because it is not my proposal. 10.195. I merely want your opinion as to whether the issue of 1/. notes would necessarily have any tend- ency to increase the number of bank offices ? — The proposal which I had in view was one by which private banks should be allowed to hold a reserve of Govern- ment notes without paying interest for them except in proportion as they used them, giving Government securities as against the notes. That proposal has been made, I think, by Mr. Eoxwell. It was to that that I alluded. If we once go into the question of the issue of 11. notes, and I think that the country ought to go into the question, we should naturally re-open the broad issue whether it is worth while for the country to exert itself to increase the number of branch banks in small towns. 10.196. You would consider, would you not, that one great reason why there are more branches of banks in small towns in Scotland than in England is on account of the Scotch banks not being put (o any expense in the matter of till money by having tho right of issuing their own notes ? — Yes. 10.197. In your answer to question 9871, you said, " I would projjose that the bank shovdd keep in the " form of gold 1,000 sovereigns for every 2,000/. of " notes of what(3ver denomination is used." You are aware that one reason against that was that if that were enacted, then at any time of gradually growing stringency the Bank of England would bo obliged to double the amount of their sovereigns for every pound of notes that came in for payment, and that the reason for adopting the present system is that it would not have that effec'; in times of stringency ? — Well, I know that was held, but it seems to me that the whole business of banking is one which each generation has solved for itself. I have myself very little interest in the past controversies on the Bank Act, because almost all the arguments that were brought forward on either side seem to me to be based on conditions that do not exist now, or at all events not exactly exist in the form in which they existed then. Of course it is true that in case we ever should be invaded there might be an almost unlimited demand for bullion, but unless we should meet with some disaster which was next door to the destruction of the nation, I cannot myself think that with our present appliances of the telegraph any such run would be probable. 10.198. But in times like 1847, 1857, and 1866, as the law at present stands, if the Bank loses 1,000,000 of sovereigns their reserve is ]'educed by 1 ,000,000, but under your proposal it would be reduced 2,000,000. I do not think that this question quite falls within the scope of our inquiry ; but as you have expressed the opinion, I should like to ask you whether you have considered the point thoroughly, and whether you do not think there is an advantage in the present system ? — Well, you see, I think it is essential as part of my system that the average I'cserve of the Bank should be about 20,000,000 more than this minimum reserve. You TviJl perhaps notice that I proposed that when the rate of discount should rise to 10 per cent., tho directors should be able, without -waiting for the authority of the Government, to issue notes in excess of twice their bullion reserve. But while admitting t.hat the wonderful efEciency and economy of the English banking system has been a great aid in our progress, I hold very strongly that by far the greatest evil that we have to deal with is the occasional pressure in the money market. I know that that is much less now than it used to be, but to my mind this silver question is not of anything like so great importance to the nation as the question of the right constitution of our banking reserve. 10.199. I am glad to hear your proposal of 10 per cent., because it exactly tallies with the amendment I myself proposed in Mr. Lo\ve's Bill when ha was Chancellor of the Exchequer ; but so far as the pro- portion which the Bank is to hold as against its buUion, the effect upon the banking department of the Bank would simply be that in the one case, for every mil- lion of gold which it lost, it would have to call in 2,000,000 of notes, and in the other case it would only have to call in one, and I gather that you really think there would not be any disadvantage in that change ? — No, because this would not operate, of course, until 20,000,000 had gone, which is a very large sum to go. 10.200. Then you propose to fuse the banking and the issue departments in that case ? — Yes. 10.201. Because, if you do not propose to fuse the banking and the issue departments, then, of course, whatever the amount of the reserve might be, even if it were 50,000,000, still if the Bank lost 5,000,000 your 50,000,000 would be reduced by 5,000,000, and in the other case by 10,000,000?— The change which I propose would abrogate the 1844 Act, and the distinction between the banking and the issue Mr. A. Marshall. 23 Jan. 1888. 46 EOYAL COMMISSION ON GOLD AND SILVER: Mr. departments would therefore go as a part of the change. A. Marshall. I wish to say again what I think I did say last time, that I give these numbers only for the sake of definite- 23 Jan. 1888. ness. I should not dream of presuming to give any opinion as to what the numbers should be, as to whether the notes should be twice or three times, or one and a half times as large as the bullion, nor as to whether the ordinary reserve in excess of this should be 20,000,000 or 30,000,000. If there would be any doubt as to whether 20,000,000 would be sufficient to guard us from ever being likely in any ordinary time to have reserve getting down to its minimum at which the bank had to withdi-aw two notes for every sovereign withdrawn from it, I should be inclined to raise that 20,000,000 to 30,000,000 or more. Of course we could afford to do that, because we should have diminished in other ways the expense of our currency. Also it must be recollected that in no case would it be necessary to withdraw two notes for every sovereign after the rate of discount had risen to 10 per cent. 10.202. But if you should propose that the Bank should be obliged to withdraw any given proportion of notes as against a loss of sovereigns, then you would be obliged, would you not, to keep the issue department separate from the banking department, because other- wise, practically what you are indicating is merely that they should have a certain minimum of reserve ? — I think the new Act might be so worded as to create a new issue department. But I do not see that it is essential to have a separate department in order to carry out the Act I now propose. 10.203. (Mr. Montagu.) In your evidence in answer to question 9841, you refer to my suggestion with regard to a convention for universal bimetallism, or a fixed mint ratio, as you term it, of about 20 to 1 , with a seigniorage of 1 per cent, on silver. You have no objection, on principle, to a seigniorage. I think your evidence shows us that you rather advocate a seigniorage on silver ? — I should have no objection, but I cannot exactly be said to advocate it, because I do not think that a seigniorage of 1 per cent, would be sufficient in amount to prevent there being a great strain on the adopted ratio between gold and silver, though the strain would be somewhat less, perhaps, than under fixed ratio mintage pure and simple ; yet there would, I think, still be a danger of a strain upon that ratio. 10.204. I also suggested a seigniorage of one quarter per cent, on gold to cover the cost of minting. You advocate in your evidence the use of gold bars for international payments. Would not a small seigniorage on the gold, and, say, a larger seigniorage on silver, tend to bring about that result, that bar gold and bar silver would be preferentially used for international purposes ? — I think it would. At the same time I have myself a great objection to a seigniorage on gold, unless the gold coins are supple- mented largely by paper money. If they are sup- plemented largely by paper money, if the basis of our currency is a very large volume of bars, then I think it is desirable to have a seigniorage on gold coins ; but if we have a state of things at all like the present, with our real reserve supposed to be in the pockets of the people, then by levying a seigniorage we cause the exchanges to have, of course, a larger margin of fluctuation than they otherwise would have if there were no seigniorage, and I regard that as a great evil. One of the chief motives which I, as well as Eicardo, had for advocating the use of bars instead of sove- reigns was, that as things are at present, in consequence of the wear and tear of coins, and in some cases of the seigniorage, there is a greater fluctuation in the rates of exchange between different gold-using countries than there ought to be, 10.205. Are you aware that in Germany and France, and in most other countries, there is a small charge, about equivalent to one quarter per (jent., on coining ? — It was such cases as those that I had in view. 10.206. And that in consequence the bar gold is chosen preferentially ; if bar gold exists, say, in the national banks, the coin is not melted up ? — Yes, I was aware of that. 10.207. Therefore to that extent it would be an advantage ? — Yes. 10.208. Would not a seigniorage of 1 per cent,, or, say, even 2 per cent., as is charged in India, prevent the settlement of international balances in silver coin if there were an international convention ? — It would tend that way. 10.209. Because gold would have to be at a premium of the 2 per cent, before silver could take its place .? — Yes. 10.210. If all mint regulations were identical under convention, and silver bars were sent to this country, the motive could not be in order to get gold, because silver would be a legal tender equally with gold ; you agree with that ? — Yes. 10.211. Therefore, if silver bars were sent to England because the exchanges were in our favour, when the exchanges turned against us we could export that silver in lieu of gold ? — Yes. 10.212. In answer to question 9856 you state that you do not wish to prevent fluctuations in the price of silver. Is there not a certain disadvantage in trading with our Indian fellow subjects, owing to variations in exchange, which frequently varies 1 per cent, in a day ? — That is not what I meant. You are now reverting to an answer which refers to my favourite scheme ; for what I have called a true bimetallism. I meant that under it there would no longer be any necessity for trying to prevent changes in the gold value of silver ; because those changes would not disturb the course of international trade, as they do now. One chief merit that I claim for the scheme is that it would work on steadily and supply a stable international currency in spite of these changes. 10.213. But do you not see an advantage in having a steady exchange with India and silver-using coun- tries ? — My object in that scheme is to get a steady exchange without its being necessary to fix the gold value of silver. 10.214. But I understood you to suggest, that different countries should agree to coin silver in large quantities, and yet you leave to them the conditions under which they would issue the silver. Con- sequently the silver would fluctuate perhaps even more in such a case than it does now ? — You are now alluding to a different scheme, that which I have called universal humpbacked monometallism. In that scheme I propose that a seigniorage should be levied on silver in most countries about as heavy as it could bear ; that silver should not be international tender at all ; that for international purposes we should have nothing whatever but gold ; and that therefore the fluctuations in the gold value of silver should not cause any disturbance in the exchanges. I would wish, however, to repeat that this is not my favourite proposal ; it is not one that I am prepared to advocate, though I think it is one of many schemes which has as much right to a full and fair discussion as fixed, ratio-mintage has before any action is taken. 10.215. Would it not be disadvantageous to all governments to make frequent changes in their currency ? — Yes. 10.216. Therefore, that proposal which you made, whether your own, or of others, would cause frequent changes of necessity — I should say frequent changes in the value of the silver coins ■> — I am aware of that disadvantage, and it seems to me to be the greatest disadvantage that the scheme has. It has been that more than anything else that has prevented me from saying that I would like it introduced, though, so far as I can see at present, I would myself prefer it to fixed ratio mintage. 10.217. In such a case if you have no international convention, silver might be quite depreciated, and the countries having to coin silver according to that plan would have to change the weight of their silver coins MINUTES OF EVIDENCE. 47 to prevent iorgery ? — The difficulty would not be greater than it is in France now. 10.218. With regard to the rise that is mentioned in tin and copper, are you aware that the rise is attributed to a speculative syndicate ? — Yes. 10.219. One more question with regard to the Indian Government ; would not the payment of pensions in sterling involve a loss of net exchange in the same way as the loss on the interest on the gold debt ? — ^Yes, except in so far as it may be supposed that the persons who receive the pensions were induced to enter the service of the G-overnment by the promise that their pensions should not be affected by the fall in the value of silver. 10.220. I forgot to ask you with regard to the market ratio being fixed at 20 to 1, what is your principal objection, if any, to that proposal ? — My own objection to fixed ratio mintage with a fixed ratio of 20 to 1 is not at all strong. I should regard it, however, as very likely only a transitional arrange- ment. 10.221. Say, under a convention for 20 years ?— Yes. Well, I would myself rather it was made a convention to last as long as it could last. I would not propose to put a definite limit to it. I then should not regard it as in any way an evil, but I could not exactly advocate it ; I should rather be neutral with regard to it. But I should be distinctly opposed to its being adopted in a hurry before other schemes had been fairly discussed. 10.222. {The Chairman^ Supposing that the in- creased supply of money at the Bank of England led to a lowering of the rate of discount and so stimulated speculative activity, would not a great deal of that speculative activity, perhaps the greater part of it, be likely to expend itself in new production, whether it is starting fresh mills, sinking fresh mines, or increasing the production of commodities? — Certainly, in the long run, but then this effect that we are looking at is, from the nature of the case, only a temporary one, and the immediate effect of the starting of new companies is to add to the demand for commodities much more than to the production of commodities. 10.223. Is that so, does it not very speedily arrive at the addition to the quantity of commodities ? — I fcihould doubt that. 10.224. Within a year would it not ? For example, in the West of America we are told that" the greater part of the land there is cultivated by means of capital coming from the east. Well, that capital would result in increased cereal productions within probably a year or a couple of years at the outside ? — Yes, but a year is a long time when we are talking of the action of a rate of discount upon speculation and prices. I mean that supposing that gold comes into the country to Lombard Street in the first instance, it scatters itself over the country in much less than a year. From that point of view a year is a long time. 10.225. Yes, but supposing that you are right in your view as to the way in which the addition to the stock of gold would affect prices or the diminution would affect prices, that effect would only be tem- porary, because in the long run and within three or four years the effect might be increased production and reduced prices, owing to the very activity that you have stimulated ? — I do not think that the stimulated activity due to a cause of that kind would have an effect of very great volume on production. Of course it is possible that the influx of gold from the mines in the last 30 years may have caused production to have been very much greater than it would have been. Opinions differ on this point. My opinion is that it has not in the long run any great effect ; that it has caused the movements to be spasmodic ; but that the increased production would have been very much the same without the new gold. 10.226. {Sir T. Farrer.) You have sent us a paper giving your views concerning the effect of a fall of exchange on trade with silver-using countries. Will you be so good as to put it in as part of your evidence? And will you be so good as to turn to Mr. Nisbet's evi- dence, and especially toquestions 10,026-10,033, 10,044, 10,068, 10,077, and 10,113, in which he states speci- iically that a fall in the exchange value of the rupee at oncelowers the gold price of Indian wheat in the English market, and gives instances of it. And will you be so good — either in answer to this question or in your paper — as to tell us what in your view is the real explanation of the cases Mr. Nisbet mentions : whether the fall in the value of silver has any, and if any what, effect on the English gold price of Indian wheat ; what are the real causes of the fall in exchange and of the fall in the price of the wheat respectively ; and how it is that the two phenomena coincide so as to lead to the common belief that the one is the cause of the other ? I should like to ask you farther whether, if there had been no fall in the gold price of silver, other circumstances remaining the same, there would not probably have been a greater fall in the silver price of Indian wheat, than there has been ? Will you at the same time be so good as to look at Mr. Barclay's evidence in which he says that the fall in exchange has precisely an opposite effect on the sale of English cotton manufactures in India, and that by increasing the number of rupees which the Indian consumer has to give it either prevents sales or compels the English producer to take a lower gold price. And will you be kind enough to explain how in your opinion, this fall in exchange, which prima facie seems to have the effect attributed to it, by Mr. Barclay, really operates ? — I shall have much pleasure in doing as you request. {Memorandum put in.) Memorandum: as to the effects which differences between the currencies of different nations have on international trade. It is impossi))le to discuss adequately in a memo- randum the causes which determine the course of the foreign exchanges and the reciprocal influences which they exert on the course of trade. I must, therefore, start by taking for granted the solution of these questions with regard to the trade between two countries A. and B., each of which has a gold currency. Eicardo's reasoning on this subject have been developed by Mill, Mr. Goschen, Mr. Giffen, Professor Bastable, and others ; and it is now clearly established that trade tends so to adjust the supplies of gold relatively to the demands for gold in the two countries as to bring gold prices at the seaboards of the two countries to equality, allowance being made for carriage. If they are higher in A. than in B., there will be a small temporary bounty on exportation from .B. to A. corresponding to this difference, which must always be small. Bills drawn in B. on A. will multiply, and, specie point being reached, gold will go from A. to B. till prices in B. are as high as in .^. If B. hoards gold this process may be a long one, otherwise it is sure to be short. The fluctuations of the exchanges measured in terms of gold bars, that is of gold regarded as a commodity, are limited under ordinary circumstances to the double cost of carriage of gold. But when measured in terms of the currencies of the two countries the limits of these fluctuations are liable to be extended by the sum of the seigniorages (if any) charged in the two countries, and in extreme cases by the sum of the amounts lost by wear and tear, not indeed from the average coins in circulation, but from those picked coins which are selected for the purposes of export. It may not be an unnecessary caution to remark that even when the exchanges are at par, the trade bills on the one side need not exactly balance those on the other, for those on either side are likely to be supple- mented by paper documents or telegrams representing (i.) the transfer of newly borrowed capital, (ii.) the repayment of business outlays and the payment of interest or profits on previous investments of capital, (iii.) the drawings by absentees who live temporarily Mr. A. Marshall. 23 Jan. 1888. 48 ROYAL COMMISSION ON GOLD AND SILVER I Mr. A. Marshall. 23 Jan. 1888. or permanently in one country and derive their means of support from another, and (iv.) the drawings of a government whico expends in one country part of the income which it derives from another. Under the first liead come such items as the transfer or telegraphic sale of " international securities," that is, of securities which, whatever be the country of their origin, have a marliet in both A. and B. When thus it is said that an increase of purchasers abroad maizes the exchanges unfavourable to either country, it is always tacitly implied that other things are equal ; that is, either tliat there is meanwhile no such disturbing cause as a transfer of stock exchange securities, &c. from one country to another, or that separate allowance is made for its effects. For instance, if B. should fall into political discredit, and those who had invested capital in B. should want to bring it home, that would cause a premium on bills ilrawn on A. by exporters in B. Under the second head come trade expenses of many different tinds, and especially in connexion with the shipping trade. The wording of the problem is further complicated, but its substance is in no respect whatever changed if we consider A.'s trade not merely with 5., but with all other countries which have a gold currency. But while referring to the ordinary text hooks for the general treatment of tlds part of the question, I wish to observe that its real nature has been in some measure disguised by the habit, borrowed from the City, of describing the trade in the precious metals in difierent language from that used in describing the trade in any other commodity. If on the balance B. is indebted to A., and in consequence the exchanges are "favourable " to A., merchants in B. will consider what things they can send to A. and sell there at a price higher than they could get by investing the same money in a bill on A., on which they have to pay a premium ; in every ease they have to allow for cost of carriage, &c., and for interest on the time required for realising. If the premium on the bill is just equal to the cost of carriage of gold, so that it is indifferent to a merchant whether he buys a bill or sends the gold it is said that " gold point " has been reached. But with equal appropriateness it might be said that " lead-point " is reached, or that " Egyptian- point " is reached, when the difference between the prices of lead or of Egyptian bonds in the two countries is just balanced, after allowing for the charges of transport, by the premium at which bills on jt. sell ill B. The question whether any one thing, such as lead, can exercise any important influence in adjusting the balance of trade, depends partly on its portability and partly on the extent of the market which it finds in either country. The power of gold for this purpose is therefore of primary importance between two countries which have a gold currency, for gold has in each a practically unlimited market. But its influence would be much weaker if one of the countries had a paper currency or a silver currency. Firstly, let us consider the trade between England and Eussia. Gold prices in England and rouble prices in Russia are determined by the work whicli the cur- rency has to do in either country on the one. hand and the volume of that currency on the other. And when trade is in equilibrium, the gold price of the rouble will be fixed just at the ratio which gold prices in England bear to rouble prices in Eussia. For, suppose that it we're not at this level, but were, say, below it ; that is, suppose the number of roubles which exchanged for 1/. to be increased above the ratio which the goods that were priced at 1/. in England bore to those which were priced at a rouble in Eussia, allowance being made for transport. Then exporters from Eussia would sell their goods for gold which, when converted into roubles, would give them more than ordinary trade profits ; while importers into Eussia would lose money if they sold their bills on Eussia at the current rate of exchange. The immediate result would be that these importers would refuse to sell at that price, but would prefer to buy Russian goods and bring them back. Exporters' bills in Eussia would therefore be without any market at the old rate, and their value, or, in other words, the rouble price of the sovereign, would fall almost instantaneously. That is, the gold price of the rouble would rise almost instantaneously until it was equal to the ratio in which gold prices in England stand to rouble prices in Eussia. In the same way it can be proved that the gold price of roubles cannot be in equilibrium above this level ; and therefore that in equilibrium it must be at this level. Next, suppose that the trade being in equilibrium, there is a sudden fall in the gold value of the rouble due to some extraneous cause, as, for instance, political apprehensions. To put the case in the strongest way, let us suppose that these apprehensions are not shared in Eussia; and that at first there is no depreciation of the rouble in Eussia, and no rise of rouble prices there. Russian exporters will then c:^pect to sell at an unchanged gold price, and to convert that gold price into a greater number of roubles, and thus to make .abnormally high profits. All those, therefore, who were in doubt whether to export or not, will do so in order to gain the anticipated bounty from the exchanges. There will be a flutter of increased exportation from Eussia. The excessive supply of Russian exports in the English market may lower their price there a little. But this bounty on exportation from Russia can last only until Russian exporters try to dispose of their hills ; the moment they do that they will find that since a bill for lOOZ. will give the means of purchasing only as many English commodities as before ; and since by the hypothesis there is no depreciation of the rouble in Russia, these can be only sold for as many roubles as before, and no one will continue to pay a premium for the bill; the gold price of the rouble will adjust itself almost instantaneously to the ratio which gold prices bear to rouble prices. Different suppositions may be made as to the causes of the fall in the gold value of the rouble, but it will be found that by similar routes we get in all cases to the same result, namely, that a fall in the gold price of the rouble cannot give any permanent stimulus to importation from Russia, because it must almost instantaneously accommod;ite itself to the ratio which gold prices bear to silver prices. But of course this does not exclude disturbances of the Russian exchanges due to fluctuations in the relative supplies of importers' and exporters' bills and other international obligations. Such disturbances may, as we have seen, occur be- tween two countries with gold currencies. They may give a bounty on exporters' bills in consequence of excessive importation ; or through her lending to other countries, or, which is more; probable in the case of Russia, through other nations withdrawing some of the capital which they have lent to her. It is worth while to rema]'k that this last event is especi- ally likely to happen when political distrust has lowered the price of the rouble ; and this fact is perhaps accountable for much of the popular belief that a fall in the value of the rouble gives a permanent bounty to Eussian exporters generally. For people see that a fall of the gold price of the rouble is accompanied by a prolonged bounty on exportation from Russia ; and think the first event is the cause of the other. But the real cause in this case is a general distrust of Russia's economic future, which makes investors desire to withdraw their capital from Russia; at the same time that it makes the price of the rouble fall, and so long as they are withdrawing cai;ital,the exchanges must necessarily be such as to give a general bounty on exportation from Eussia. Before quitting this subject we must consider another way in which a Eussian exporter may appear to be receiving something more than a temporary bounty from a fall in the value of the rouble, when really his gain is due to causes that are independent of the currency ; but whereas, when capital is withdrawn from Eussia all her exporters get a bounty, in this case some of them get the bounty at the expense of MINUTES OF EVIDENCE. 49 others. Suppose, for instance, that the Russian wheat grower is ablu to deliver his wheat at a profit in the Enghsh marivct at a lower price relatively to that which the exporters of other Russiiin produce require in ordov to go'- a fiiir profit. If Ivussia had a gold currency, the price at which she could dehver wheat in England would fall a Utile, and people would « see in the change merely the substitution of wheat for other Russian exports. As it is, however, this fact is likely to be disguised. The exporter perhaps sees the gold price which he gets for his wheat go on falling even faster than the rouble price at wliich he can afford to sell it, but since the gold price of roubles is falling too, he gets enough roubles to pay him. He and others attribute his successful sales to the fall in the gold price of roubles. But the fact is that if he had not been able to deliver his wheat at a lower rate relatively to the average exports from B. than before, he would have got no bounty ; the sustained high profits which he does make are not dependent on the nature of Russia's currency, but would exist equally if Russia had a gold currency. Next, let us consider the trade between England and a country which has a silver currency, say India, this case differs from the preceding only in con- sequence of the fact that silver is an exportable commodity, and roubles are not ; and, therefore, while the gold value of the rouble adapts itself almost instantaneously to the ratio which the gold prices of goods bear to their rouble prices (allowance being made for cari-iage), the adjustment is liable to be delayed in the case of the rupee. For whereas Russian exporters could generally make no use of their bills on England except to buy with them (or to sell them to others who want to buy), commodities in the English market whose gold price had not altered, it would be otherwise with the Indian exporters. If silver has fallen in value in England and not in India, they will make a good business by using those bills to buy silver, and so long as tins state of things lasts there will be a steady flow of silver !o India. During the whole of this process there will be a bounty on the exportation of goods from India ; and,, therefore, it is interesting to inquire how long it will last. In the first place it must be admitted that a fall in the sold price of silver may cause Englishmen to distrust Indian securities, public and private. This will lead them lo withdraw capital from India, or at least to check their lendings to India; and this will diminish the number of bills which India is able to draw on England, and thus give a premium to the bills of exporters from India. But as in the parallel case relating to Russia, we may put aside a dis- turbance arising from this cause as extraneous to our main investigation. And if this be put aside we shall find that the premium cannot last long. Those who hold the contrary opinion generally insist that as custom forbids silver prices to change in India, they must be taken as a fixed point, and we must expect any change in the gold price of silver to cause a parallel change in the gold prices of commodities in the western world. 1 myself think that the force of custom in India is much less than is generally supposed, but in order that my main art'ument may not be takcii in the flank b}- an attack on this point, I will for the present assume that their premises are correct. _ Assuming then that the flow of silver to India will not appreciably aflisct the purchasing power of silver there, it is clear that the flow of silver will go on until either the gold price of commodities has fallen in the English market or the o-old price of silver has risen there, or lastly there has been a little of each of these changes, with the effect in each of the three cases of making the gold price of silver again equal to the ratio which the gold prices of ■roods in England bear to the rupee prices of goods in India (allowance being made for carriage). So much is common ground, but there is a difference of opinion as to the way in which this result will be brought about. o 54648, According to the older, and, as I believe the juster view, prices in England are determined by the relation in which the amount of l)\isiness done in England stands to the volume of the currency, account being taken of the methods of business. Thus those purchases which are made by cheques and other instruments of credit are set on one side, and there are left remaining those purchases which are made with currency. Changes in the habits of business would of course alter the proportion which these purchases are of the total business ; and the effects which such changes have in raising or lowering prices may at any time be nmch greater than those due to changes in the volume of the currency. But it is clear that a change in the gold price of silver has no effect on the methods of business, that for instance it does not either increase or diminish the proportion of the purchases in which payment is made by cheques. Therefore, if the gold price of silver affects gold prices in England, it must do so either by increasing the amount of goods that are brought into England or by diminishing the x'olume of her currency. Now it is admitted on all sides that the readiness of the East to absorb large quantities of silver (and indeed of gold also) has caused the volume of the currency through- out the West to be less than it otherwise would ; and that although England's own demand for silver is at present very inelastic, yet the absorption of gold by other countries of the West to take the place of their lost silver has tended to lessen the volume of England's currency, and therefore to lower prices in England. The precious metals are then so distributed through- out the world, that independently of the demand for them for the purposes of hoarding and of the arts, each country has just that aggregate amount of the two metals which corresponds in value to the volume of that part of her business which the habits of her peo}ile cause her to transact by payments in coin, account being taken of the rapidity of circulation of coin, and of the absorption of some quantity of the precious metals to act as the basis of a paper currency. The question what part of a country's share she takes in gold and what in silver is deter- mined entirely by her own tastes. (If she mints them freeljr at. a fixed ratio, it is then determined for her by Gresham's law ; but just now we are not concerned with this case.) Thus then 1 regard the volume of the business in each country which requires the use of coin as deter- mined by each country's wealth and habits ; the proportion between the gold and silver which it uses, whether for currency, for hoarding, oi' for the arts, as determined by its tastes ; and these conditions all the world over as determining the aggregate demand for silver and the aggregate demand for gold. The aggregate supply of each metal may be taken as a fixed quantity at anj time, because its annual increase is in any case but a small part of the total stock existing ; but yet this is slowly modified by the annual pro- duction, which is governed by the richness of the mines on the one hand, and the value in terms of commodities of an ounce of the metal on the other. The value of each metal is determined by the relation in which the supply of it stands to the demand for it. The ratio between the two values thus determined is the gold price of silver. According to this old, and I had thought well- established, doctrine, the gold price of silver is determined by the ratio between the prices of commodities in gold and in silver countries. If any sudden discoveries of silver mines in the West, or any discarding of silver from Western currencies, should disturb the equilibrium, the silver that was not wanted in the West would go to the East ; and even if its influx into the East did not lower its value there, its efflux from the West would raise its value there till it and the ratio which gold piicesbear to silver prices were equal to one another. As a matter of iact, partly in consequence of improvements in production, the volume ofcurrencv iu the West has diminished Mr. Marshall. A 23 Jail. 1 50 ROYAL COBIMISSION ON GOLD AND SILVER : Mr. relatively to the work it has to do, and this has A. Marshall, caused gold prices to fall ; and the value of gold to rise relatively to commodities. This change, together 23 Jan. 1888. -yyitti the (greater or less), fixity of silver prices, has, I contend, raised the value of gold relatively to silver, i.e., has lowered the gold price of silver. It is true that no trustworthy statistics are forthcoming by which to establish independently the statement that the volume of currency in the West has decreased relatively to the work which it has to do. But the account which I have given claims to be consistent with all our economic knowledge, and to ascribe no effects to any cause save those which the cause is known to be likely to produce. This being the older view, we may next turn to consider the new doctrines which has been put forward in opposition to it by Mr. Barclay and others. I understand it to he that some external cause has produced the fall in the gold price of silver, and that in consequence (i.) Indian exporters being content with the old silver prices, and their silver prices being equivalent to lower gold prices than before, they are willing to accept lower gold prices, and therefore the gold prices of Oriental goods fall in England, (ii.) English exporters can sell their wares in India for only as high silver prices as before, and as these are worth less gold than before English producers of goods that are sent to India get into the habit of accepting lower prices wherever they sell their classes of goods, and (iii.) by sympathy there is a fall in the prices of other English goods, this fall being produced not, as the older economists mjiintain, by a diminution of the volume of the currency in gold countries relativelyto the work which it has to do,but by the direct effects of the fall in the gold value of silver. I will first consider the theoretical side of this argunvent ; and turn to its statistical basis later on, I reject as invalid its first step, because I think that Indian exporters to England are not likely to sell their goods for a less price than they can get. Goods which they have offered for \00l. they will still offer for 100/., only instead of using their bills to buy English goods in return, they will give their attention to that one commodity, silver, which, according to the hypothesis, has fallen in the English market and not in the Indian. It is true that, finding their trade exceptionally profitable, they will probably increase their exportation to England, and slightly glut the market, and perhaps have to sell temporarily for 99Z. what they had sold for 100/. But neglecting as they necessarily would other goods, and taking back silver almost alone, they would want a very great deal of it. Next tui'ning to the second step of the argument, I reject that on similar grounds. If the exporters from England find that they cannot sell their goods in India at as good prices as elsewhere, they will look about for other markets, and perhaps stint their pro- duction a little. Less being sent to India, there will be a lack of bills on India, and this again will make the flow of silver to India more violent. In this way 5,000,000/. a month of silver could easily be absorbed, and such a drain would speedily exhaust the surplus store of silver in Europe, and raise the gold price of silver to its old level. When that was done things would go on as before. It has been urged in answer to this argument that there is not a large stock of silver in England free to be sent to the East. But in so far as this is the case, my argument is not weakened, but strengthened. For when the fall in the value of silver in the English market has caused Indian merchants to select it in preference to English goods for importation into India, then the scantier the available supplies of silver, the more quickly will the demand for it raise its price to the old level. In practice, however, the English market has of course the power of causing by indirect means deliveries of silver in India greatly in excess of the free stock of silver at the time in England. I contend then that, if the currency in gold coun- tries is large relatively to the business which it has to do, prices then will be high, and if any external cause brings down the gold value of silver, without sub- tracting anything from the currency of gold countries, there will be a violent and rapid flow of silver to India ; this will be not a quiet current, but a deluge like that which occurs when the embankment of a reservoir breaks down and water rushes from its higher level violently over the plain, so that the levelg in the reservoir sinks to that of the plain almost instantaneously. The actual course of events appears to have been that an increased production of goods, combined with the adoption by many countries of a gold currency, and slackening of the growth of many (though not of all) of the artificial substitutes for the currency as means of payment, has gradually raised the value of gold in the West. Whenever the West has had a little more silver than usual to spare, the East has promptly taken it ; when its gold value has fallen below the ratio which gold prices bear to silver prices by ever so small a percentage, it has flowed in a largely augmented current. Its value never has diverged to any considerable extent, and for any considerable time from this level. That it has not done so is proved both by our general knowledge of the trade and by the fact that there never has been a torrent of silver flowing to the East such as would have been immediately caused by such a divergence. And indeed the fall in the real value of silver in Europe relatively to India seems to have been greater, and to have given a higher premium on the importation of silver into India and the exportation of goods from India before 1 873 than after it. For her importation of silver during the fourteen years ending 1872-73 was 837 lakhs annually, and only 654 lakhs annually during the foUowinj^ fourteen years ; while her net exports of commodities were about equal in the two periods, in spite of the fact that she was borrowing foreign capital more freely in the former than in the latter period. These facts are in accordance with the truth that a fall in the gold value of silver does not by itself cause an exportation of silver from gold to silver countries ; it may or may not be accompanied by other events which do cause that exportation. Thus, then, I conclude that the gold prices of goods in the West cannot be affected to any considerable extent by a change in the gold price of silver independently of a change in the relation between the volumes pf the currencies in gold countries and the work which they have to do. When a fall in the gold price of silver is accompanied by the exportation of silver to India, the question whether that exportation will affect gold prices depends on whether the silver is surplus silver or not. If it takes only surplus silver and does not narrow the basis of Western currencies relatively to the work which they have to do, it will not affect prices. If it does narrow that basis, it will lower the gold prices of goods ; and then people may attribute this fall not to its true cause, the narrowing of the basis of the Western currencies, but to an event which hap]3ened to accompany it, the fall in the gold value of silver. So far I have been content to speak as though silver prices in India were practically fi.xed by custom. But rather to relieve my own mind than because it is necessary for my argument, I should like to state that minute inquiries from persons engaged in business in India, and a study of Indian history and statistics, have convinced me that the rule of custom is feebler than is generally supposed, and that it does not extend to many of the most important classes of goods, especially those with which inter- national trade is chiefly concerned. For instance, having drawn side by side curves representing the movements since 1870 of Indian numbers, representing the courses of general prices in England, Germany, Prance, America, and India respectively, I find that the curve which shows the greatest variations is that of India. And the case would be even stronger if account be taken of the facts that in India there are at one and the same time greater local variations of MINUTES OF KVIDBNOE. 51 prices than iu any Western country, and that many of the sharpest of the variations in price destroy one another when added together to find an average price for the whole of India. I believe that India is changing her economic character very rapidly. There is a great increase of Avliat medicBval economists call adoerations, that is the substitution of payments by cash for barter, for Ihe exchange of services, for labour dues, and for produce rents. This has caused a greatly extended need for currency, and would have lowered prices very much if silver had not flowed in in large quantities. In spite of the fact that the hoarding of silver overshadows its use as currency in India, I think we may reasonably'- suppose that this influx has caused prices there to be higher than they otherwise would have been. I will now pass to the statistical side of the argu- ment that the gold price of silver influences the course of trade in a way which the reasonings of the older economists fail to explain. I have read I think nearly everything that has been written on this subject, and have not found a single instance of well authenticated facts which do not seem to me in complete harmony with the older doctrines. India has undersold other countries in certain goods in which she has obtained a relative advantage, and no doubt partly in consequence, she has been undersold in othfsrs. In some goods she has been undersold by gold countries and in some by silver countries, in some goods she has undersold gold countries and in some silver coimtries. A fall in the gold price of silver has been coincident sometimes with an increase in her trade with gold countries and a fall in her trade with silver countries, and sometimes vice versa. All these facts are iu accordance with the older doctrines, and are (lifEcult to be explained by the advocates of the new opinion that changes in the gold price of silver exert a great influence on the course of trade. Much stress has indeed been laid on the fact that India is now able herself to manufacture some of her own raw cotton. But the prophesy that if England allowed her once to have a good start, she would supply herself with all the coarse goods she wanted, was made before much had been heard of a continued fall in the gold value of silver. Colonel Eaynsford Jackson for instance says (Fortnightly Review for June 1876), " Such are the elements of advantage " on the side of the Indian manufacturer that he can " retain the coarse trade without a duty. . . This " trade is virtually gone from England." As a matter of fact it has left England so much more slowly than was then prophesied that, if we argued post hoc, ergo propter hoc, we might conclude that the fall in the e-old price of silver had retarded the growth of Indian cotton mills. And though it is not strictly pertinent, I cannot forbear to say that if we so governed India that she had to continue always to send her cotton to Euo-land to be manufactured, our rule of India coukl not be justified at the bar of history. I will now turn to the wheat trade. It has already been brouo-ht before the Commission that the growth of the Indian importation of wheat has been influenced by a series of good harvests in India, by the making of rnilways through wheat districts, by the lowering of fre("hts, and by improvements in the methods of cleansin" Indian wheat and fitting it for European consumption. The good hai-vests have kept the price of wheat on the inland fields from rising, the railways have in several ways done more in helping the price of wheat at the Indian seaboard to approach near to its price on the field than they have done for any other important Indian product. The lowering of ocean freights has brought the price at which Indian wheat can be delivered in England very much nearer its price at the Indian seaboard. The improvements in the arts of cleansing, &c. have raised the price which millers are willing to give for it relatively to other wheats. That, under these circum- stances, it should have succeeded to so very small an extent in displacing other Indian produce in European Mr markets is a fact which seems to me to require ■ special explanation. And this I find in observing ^- Marsnau. that wheat is in many new countries practically a bye ^g j^^^^ jggg_ product, the main product is often cultivated land ; people are willing to grow wheat at a loss, if mean- while they get a good title to the fertile land which they have been bringing into cultivation. Whether this is the true explanation or not, the mystery to be solved seems to me not to be the rapidity, but the slowness of the growth of the Indian export trade in wheat. It is well known that the price of wheat is determined permanently by the cost of producing it, not under the easiest, but under the most difiicult conditions, and to use an old-fashioned and awkward phrase, by its cost of production on the margin of cultivation. But of course it is true that when supply is already adjusted to demand, the effect of throwing an extra supply for unconditional sale on the market is to lower the price all round. This fact has been elevated into a law, in what I regard as a misleading manner ; it is being said that the price of wheat is determined by the price of the cheapest supply. On general grounds I should expect cases in which this was in any sense true to be rather rare with reference to such a commodity as wheat, which does not perish quickly, and in which a large trade is done in "futures." I should have supposed that any small extra importation of Indian wheat would have had but a very small and trajisient effect in diminishing the price of wheat in English markets generally, that it would have been more likely to induce a few farmers in North and South America to consume a little more of their own wheat on the farm than to cause a plethora of wheat here and keep the price of wheat in general here considerably lower than it otherwise would have been. But it has long been known that some of those engaged in the corn trade do not share this opinion, and now I am asked to direct my attention specially to the evidence recently given on this subject before the Commission by Mr. Nisbet. I do not imply that he or anyone else has suggested thut the price of wheat in a year in which the harvests of the world had been bad would be low merely because the price of silver was low. But I fail to see the drift of his evidence unless he means at least this much, that the minor movements upwards and down- wards of the price of wheat, those extending over a few weeks, have been accompanied and in a great measure caused by parallel and, roughly speaking, proportionate changes in the price of silver. On such a matter as this, the opinion of experts, infinitely more important as it is than the opinion of those who are not experts, has yet to be received with some caution. For it is the natural tendency of the human mind to be impressed by striking coincidences, and even though they are few in number, to attach to them a greater importance than to many other cases in which there has been no coincidence ; and therefore we ought in all such cases to check the results of general impressions by the aid of arithmetic, when that can be brought to bear. And it fortunately happens that we have thoroughly trustworthy statistics of the price of silver and the price of wheat. One sixteenth of a penny is about • 7 per cent, of the price of an ounce of silver, and a halfpenny is just about the same fraction, about • 7 per cent., of the present price af wheat ; and, therefore, ,Mr. Nisbet's evidence would lead me to suppose that, if not as a general rule yet in the majority of cases, a fall of four or five sixteenths in the price of silver would be, accompanied by a fall of four or five halfpence in the price of wheat. In order to test his evidence therefore I have gone over the files of the "Economist" for 1886 and 1887, and selected those weeks in which the Gazette average price of wheat arrived at a turning point, either a maximum at which it ceased to move upwards and began to fall, or a minimum at which it ceased to fall and began to rise. I have taken out the prices of fine bar silver for the Friday afternoons of the same weeks (I have G 2 62 ROYAL COMMISSION ON GOLD AND SILVER Mr. A. Marshall. 23 Jan. 18S8. thought that no considerable error would be introduced b}'- taking these to represent tlie prices of corresponding weeks); I hrtve shown the changes of the one in lialfpence and of the other in sixteenths of a penny. Then I have sliov/n what parts of their movements were " together," and what movements were •' apart." For instance, if each of the different columns showed + 4, or each showed — 5, I regard that as a coincidence confirming Mr. Nisbet's view, and enter four or five, as the case might be, in column of movements together. Tf one diffi?rent column showed + 4 and the other -f- 7, I regard that as a movement together to the extent of four, so far confirming his views, but a movement apart to the extent of three, tending so far to invalidate his views. The result is as follows : — Week ending 1 "C a .S'S 1^1 g 5-^ a) d It o o 1886: d. s. d. January 2 - 46^J .30 3 January SO 46-J + 1 29 7 -16 17 February 6 - 464 - 6 29 9 + 4 10 March 6 • '46? + 4 29 -18 23 March 27 46K- - 1 30 9 + 43 43 April: - 4f;j - 1 30 4 -10 1 9 May 29 - 454 -18 32 S + 60 68 July 10 - ■th'n -17, 30 9 -40 17 23 July 31 - 43i -21 Si +30 Bl August 7 - 42 -18 31 8 - 8 8 10 AuRust 28 - . 424 + 8 33 2 +36 8 28 October 16 464 +44 29 8 -84 123 1887: January 22 - 47 + 28 36 4 + 160 28 133 February 26 46.% -11 32 7 -90 11 79 March 6 - 40 - 5 33 9 + 4 9 March 12 - April 2 - No quo- tation. -27 32 7 33 3 - 4 +16 4 43 April 23 - - 44 - 5 32 6 -18 5 13 June 11 - 43H - 3 35 4 +68 71 July 16 44ft + 4 34 -32 36 July 23 - 44ft + 6 34 3 + 6 6 September 17 444 + 1 28 8 -134 135 September 24 41,'if - 1 28 9 + 2 3 October 1 - 444 + 1 28 5 - 8 9 November 12 43i -10 30 6 +50 60 November 19 43J 30 5 - 2 2 December 3 m 31 3 + 20 2(1 December 31 441 + 14 30 9 Tots -12 la - 28 84 1,053 Note. — January 2, 1886, and December 31, 1887, are taken as the first and lasli weeks in the two years, not as weeks showing maxima or minima prices of wheat. Thus, so fiar as these figures show, the movements together of the two prices have amounted to 84, and those apart to 1,053. The latter have been more than 12 times as extensive in the aggregate as the former. I am ready to believe that persons acquainted with the corn trade may be able to point out several minor deductions which ought to be made from the force of these figures : T can even see a low myself. But after ample and liberal allowance has been made for them, there will, I think, be enough force left in the figures to prove conclusively that fluctuations in the price of silver has no considerable influence on the general prices of wheat in the English markets. Passing away from this point, I lind with, and very little to differ from, in Mr. Nisbetr's instructive evidenc-^ J agree wilh iiim when he says (Questions 10,054-5.j), " I believe very little in '■ bimetallism or aiouoiuetallisni as I'ar as regards the " supply of produce. If produce is wanted it will come. " ... Things would be no better for the British " -farmers were India and Eussia placed on the same " footing (as regards cuiTency) as the rest of the " world ; because they could produce and really do " produce such large crops that they must be ex- " ported," and again (10,065), "I do not for one '• moment believe that bi- or mono-metallism has any " i;fiect on imports of wheat, for this grain each year " comes in from all parts of the world, and it is the " natural course of affairs that it should do so." On the other hand, I am perfectly willing to accept from him the statement (10,030) "that when silver " went up in the market two per cent . . . the large " houses to whom we looked for the supplies put the " wheat up sixpencea quarter"( 10,097) "aspecial varia- " tion occurring on any particular day in the exchange " from whathappened the day before immediatelyafFects " the price offered (for wheat). I can get wheat within " six or eight hours at 6d. a quarter cheaper sometimes, " and I have had to pay 6d. a quarter more according as " the Indian telegrams come in." The statistics which I have just quoted, taken together with general considera- tions, lead me to suspect that even in these cases, other and less obtrusive causes may have assisted the Indian exchanges in putting the price of wheat up or down. But no innovation on the older doctrines of money and the exchanges is required to explain tlie tact that ii fall in the Indian exchanges makes it profitable for an Indian exporter to take a price, which otherwise he would have just refused, for a batch of wheat which he has on hand, and that by so doing he tends to lower for a time prices in the wheat market. No one denies that a gust of wind will bring down apples that are ready to fall : but we should note that it leaves fewer apples to fall with the next wind. All this then is not inconsistent with the account which I have submitted, according to which the gold price of silver is itself determined by the ratio which gold prices bear to silver prices ; gold prices being deter- mined by the circumstances of demand for a supply of currency in the gold countries, and silver prices being determined by the circumstances of demand for a supply of currency in the silver countries. When asked to express a direct opinion on the action of the causes which it is the purpose of this paper to discuss, he deliberately declined to do so (See, e.g., 10,119), and I submit therefore that such parts of his evidence as seem to bear indirectly on this question are to be taken as obiter dicta. The study of his and similar evidence has given me no reason to doubt the validity of the older explanation of the facts which he recounts. I still hold that though, " other things being equal," a fall in the Indian exchange tends to increase tem- porarily the sales of Indian wheat here and temporarily to lower the price of wheat, the careful interpretation of the clause " other things being equal " deprives this fact of the greater part of its apparent significance, and I will now sum up my conclusions as to the different ways in which a fall in the Indian exchanges may affect Indian trade. In the first place, the fall might conceivably be caused by a fall in the value of silver in India arising from the discovery of rich mines there, or from a diminution of hoarding there ; in that case silver would be a surplus commodity in India, and would flow to Europe, taking the place of other exports from India. The exporter from India would find that though the Indian exchanges had fallen and the gold price of silver had fallen, yet the ratio wliich gold prices in England bear to silver prices in India had fallen even more, and in this case therefore the fall in the exchanges would be accompanied by a penalty and not a bounty on his trade. It is true that in the actual course of events, it is the West MINUTES OF EVIDENCE. 53 aud not the East wliifli lias produced silver from its mines, and lias discardfd it from its curi-eney. Never- theless, this case is signil'icant bectiu e it l}as bicn overlooked by those persons who have niaiiitained that every fall in the Indian exchani^cs must give a proportional bounty to thu Indian iniporlei-. Next the fall in the exchange may be due to such a cause as a rumour that the Bland Bill will be. repealed. If so the stimulus which it gives to exporta- tion from India will be followed by an exactly equal check as si.on as the rumour is connadicted. Next, it may be due to an excessive drawing of bills on India by traders who have exported goods to India or by the Government which has exported personal services to India; in this case again the premium on exportation will be balanced by an equal penalty as soon as the tide turns the other way, it is a variation of the exchanges which would exist equally if India had a gold currency. Next, the fall in the exchange may be due to an increased production of silver from Western inines, or to a discarding of it from Western currencies. Then it will give a real bouni;y to tl'.e Indian exporter which will last so long as there is an extraordinary flow of silver to India ; and the extent of which will be determined by the volume of that' flow. But in this case silver acts as a commodity, and if instead of extraordinary imports of silver, India were to take from us extraordinary imports to an equal aggregate value of other metals or any other commodities, the Indian exporter would receive a bounty different in form, but exactly equal in substance and in volume. It must, however, be constantly remembered, that if silver is discarded i'rom Western currencies so as to diminish their volume relatively to the business which they have to do, there will result a fall of gold prices. Lastly, we may consider the case in which the fall in the Indian exchange is caused by an increase in the work which Western currencies have to do relatively to the volume of those currencies. This change might have the collateral effect of causing a flow of silver to India, .and if so that would, as we Jiave already seen, give a premium on exporta- tion from India so long as it lasted. This is the only real efiect that it would have on trade, though it would alter the nominal amounts of trade bills. Every bill on England would be expressed in terms of fewer connters, but the same amount of Indian goods would sell in England for the means of purchas- ing as many English goods as before; English goods would sell in India for the means of purchasing as many Indian goods as before: there would be no surplus of importers' or exporters' bills, no premium on exportation or on importation. Oscillations in the number of these counters might cause incon- venience to individuals, especially to those who were doing business with .silver countries. But it would cause no great or permanent difference in the nature of the trade or the profit at which it was being carried on. There is, however, a slight qualification to be introduced on account of those bills, whether drawn by the Indian Council or by private persons, the gold value of which is fixed independently of changes in the purchasing power of gold ; for they count for a greater real value in Indian trade when gold prices are low than when they are high. But this result is independent of the fact that India iias a silver currency ; it would be true equally if her currency were, as that of New Zealand is, convertible with England's. A rise in the value of gold increases the real value of bills drawn to cover the payment of a fixed amount of gold, whether that payment has to be made by a country which uses gold or a country which uses silver. In conclusion, I admit that the evils of oscilla- tions in the exchanges with silver-using countries are in the aggregate so great as to afford a strong argu- ment for the adoption of an international currency, but I think that action should be. delayed until we have accomplished the task, which we have hardly yet fairly begun, of examining the prin- ciples on which such a currency should be based. And perhaps I may be pardoned for remarking that a great part, perhaps more than half, of the recent oscillations in the gold value of silver are due to the varying prospects of success or failure on the part of those who are endeavouring to make 15^ ounces of silver exchange for one of gold, and that this evil would at once be much diminished if the advocates of a iixed-ratio-mintage were to adopt the ratio of 20 : 1 as the basis of their scheme. Alfred Mabsh.^li.. Mr. A. Marshall. 23 Jan. 1888. The witness withdrew. Adjourned till Friday. FORTY-SEVENTH DAY. 8, Richmond Terrace, Whitehall, S.W. Friday, 27th January 1888. PRESENT : The Right IIoiN. LORD HERSCIIELL, t'.u Chairman, presiding. Mr. D. M. Barbour, C.S.I. Mr. J. W. Birch. Mr. Henry Chaplin, M.P. Mr. L. Couktney, M.P. Sir Thomas H. Farrer, Bart. Mr. C. W. Frbmantle, C.B. Sir W. H. Houldsworth, Bart., M.P. Sir John Ldbbock, Bart., M.P. Mr. S. Montagu, M.P. Mr. GrEO. H. Murray, The Secretary. Mr. R. B. Chapman, C.S.I., called and examined. 10.227. {The Chairman^ You were recently Fi- nancial Secretary to the Government of India ? — From January 1869 to March 1881. 10.228. And your attention has been directed to the subject which this Oomrhission is investigating? — It was much directed to it when first the divergence occurred. Mr. R. B. Chapman, C.S.T. 10.229. Do you think that there is an evil of a substantial character ? — Very serious. 10.230. Would you state to the Commission what ^T^Janj^s. that evil is in your view? — In. my view it is simply the loss of stability of the standard of value. To my apprehension a steady standard of value is abso- lutely necessary for the purposes of commerce, and 54 BOYAL COMMISSIUN ON GOLD AND SJLVEli : Jan. IS Mr. R. B. if stability of standard is lost, commerce is paralj'sed. Chapman, That, in my apprehension, is what has occurred V-SJ. since the year 1873, The evidence of that loss of stability I see in the universal fall of gold prices. 10.231. The difficulty arising from the varying relation of silver and gold ? — Or rather these variations indicate the instability. 10.232. But supposing you had an alteration made. Suppose that alteration v^ere one which fixed the relation once and for all ? — That would mitigate the evil. The chief question which would then remain woidd bo whether it was the best possible relation. 10.233. When you say that the alteration has arisen, in your judgment, from an appreciation of gold, do you regard as of no importance the alleged diminu- tion in the use of silver and discredit of silver, owing to the monetary changes of 1873 ?— I think that, happily for silver-using countries, that has only operated to prevent a rise in the value of silver that would otherwise almost certainly have taken place. Silver has remained, in my judgment, nearly steady. I do not doubt that if there had been no disturbance we should have had a rise in the value of silver, though not at all to the same extent that there has been a rise in the value of gold. But, as far as silver is concerned, I consider that the dislocation has had a happy effect, not an unhappy one ; because 1 believe the value of silver to have been as yet nearly steady. 10.234. When you say the value of silver is nearly steady, by what do you measure the value ? — I know of only one way of measuring value, viz., by comparison with other commodities. You can only take a general survey. Compared with gold, silver has fallen quite away ; but silver will now, throughout the world, in London as much as elsewhere, exchange for more, and not less, of commodities than it would before the divergence took place. That is my meaning. 10.235. By reason of a fall in prices ? — I put it in this way. A thousand rupees turned into sovereigns in the year 1872 would have prt)duced 96/. in gold. Now it will produce only 71/.; but 71/. wiU go further now, than 9o/. would go in 1872. That is why I say that the value of silver has not fallen in London. 10.236. That of course may have arisen from the fact that there has been an increase in the commodities which has reduced their price in relation to silver ? — For my present purpose I think it a matter of indifference what the cause may be. I am only assert- ing the fact that silver is now more valuable, and not less valuable than it was before the year 1873. 10.237. The fact may be of some importance ; or rather, the manner in which the fact came about, may be of some importance in relation to certain suggested remedies, may it not? — Doubtless — most important. 10.238. In your view, I understand gold and silver are the only standai'ds of value ? — Yes. 10.239. You have drawn attention in the memo- randum you have written to the confusion between the functions of the precious metals as standards of value and their use as currency ?— Yes ; I venture to think, with all deference to many much more experienced authorities than myself, that a great deal of confusion has arisen through attention being con- centrated almost exclusively on currency, which I think has actually nothing to do with the present problem. By currency I understand the coined money of different countries used for current purposes. The relations in value of the whole stocks of gold and silver have been disturbed ; not only the cyirrency. 10.240. Do you regard the gold and silver as standards of value, as being in any way linked together now ? — ^Certainly, I do. It is said that silver is used still by 1,000,000,000 of the population of the world, and gold by 400,000,000. I cannot say how far these figures are trustworthy ; but so long as silver is used by any considerable portion of the world, they are linked together ; the value of the one being entirely dependent upon the value of the other. If gold encroaches upon the field which silver occupies, the price of silver is immediately affected and vice versa. They are inevitably interdependent. 10.241. That is to say, the price of the one, as measured by the other, is subject to change? — It is subject to change as things are now, there being no law which fixes their relative value, or the share of field of duty common to both which each shall occupy. 10.242. In saying they are linked together, you do not employ that expression in the sense in which it has been employed generally by the witnesses ? — Not perhaps exactly; but, in principle, yes. They are certainly not linked on fixed conditions now ; there is no reason why they should not be in my judgment ; but that is a separate question. 10.243. By what, in your opinion, is the value of gold and silver determined ? — I think, neglecting all details that might occupy a long time, that it is determined entirely by their employment for storing capital or value " at call," using the expression as bankers use it. There must, in the course of the world's business, be a very large amount so held ; according to varying circumstances the amount will vary. In my judgment the value of gold and silver depends ultimately upon this use of them and upon no other. This use of them depends in its turn, no doubt, upon their use as standards of value, because it is their use as standards that makes it possible to hold value in them at call. 10,2-14. I believe you distinguish between gold or silver that is in use, as coin for current purposes, and what is stored ? — Yes ; it is important to keep the distinction in view, but it is very difficult to define or preserve it ; for the current coin itself is a signal illustration of what 1 mean by value being held at call : the sovereign in my pocket is there, to be turned, at any moment I please, into any other form of value. There is a difference between passive and active money ; but this is the only real difference. 10.245. Which of them would you call the banker's reserves ? — The portion which remains permanently in reserve would be passive ; but I suppose there is a margin which would be sometimes in and sometimes out of the reserves ; this would be sometimes active and sometimes passive. The reserve of the Govern- ment of India paper currency department, which is practically never touched, and the minimum reserve of the Bank of England are simple illustrations of passive money. 10.246. The banker's reserve would be, so far, active, would it not, that its existence would enable cheques to be used in place of money ? — Quite so ; but I really lay no very great stress upon the dis- tinction between the two classes of money : they both ultimately perform the same function of storing value at call. 10.247. Then by what is the value of the precious metals determined ? — By the relation, from time to time, between the amount of capital retreating into the form of the precious m.etals, to stand at call pending more profitable employment, and the amount of the precious metals themselves — the whole stock, the whole amount in existence. 10.248. What do you mean by the capital that is seeking to be stored ?— Perhaps I had better illus- trate it by the case of a single capitalist : a great capitalist will have a large amount of money lying at his bankers, or, at call, in some form or other, ready for employment whenever an opening occurs. That would illustrate what I mean by speaking of capital lying at call in the form of gold and silver. 10.249. Would it be in the form of gold and silver ? — Yes ; ultimately, or he could not get his money when he wanted it ; just as the convertibility of the Bank of England's notes depends upon their being repjesented by gold and silver. 10.250. But they are not all represented by gold and silver ? — No ; but a sufficient quantity of them is so represented. MINUTES v)F EVIDENCE. 55 10.251. You would follow that analogy in the case of capital ? — Yes ; what gives the Bank of England notes their value is the certainty that they can be turned into gold or silver at a moment's notice. 10.252. And therefore, in the same way, yoxi would say that with regard to capital, so long as a man believes it can be turned into gold and silver, it is immaterial whether the gold and silver arc there or not ?— I should think it a heresy to go so far as that ; but it is no part of my theory that a £ of gold or silver is necessary to represent every £ of capital held at call. 10.253. So long as there is sufficient gold and silver to render the people in their belief secure of getting it ? — Yes ; that is it ; recoverable at any moment in the form of money. But I should prefer to omit the words " in their belief." 10.254. (il/j-. Birch.) As regards the Bank of England note, would it not be better to put in gold, instead of gold and silver ? — Yes, it is a useless complication to speak of silver in that connexion. 10.255. (The Chairman.') Then does it depend on the amount of capital which is seeking investment, in your view ? — I believe that is what most affects, regulates, and Influences the value of the precious metals. 10.256. It follows in your view that the net current accretions or decretions, bearing an insignificant relation to the whole mass, you would expect a degree of stability in the precious metals ? — Yes, but I think this depends upon a ditferent consideration, viz., upon the imperishableness of gold and silver which, once won, may be said, generally, to remain in store. This is why an addition to or a decretion from that stock is not of very great importance. Changes in the volume of a small stream flowing into a big lake do not practically affect the general level. 10.257. You have some observations, I think, to make on the correlation between the value of the precious metals and the activity of trade? — That is very much what I have been saying. If gold in a gold-using country, or indeed anywhere, is in a state of appreciation, capital is encouraged rather to remain passive than to become active ; on the other hand, if a capitalist believes that gold is likely to fall in value, he ivill be the more ready to be content with some investment which perhaps he would not under converse circumstances choose. A continuous appreciation of gold is exceedingly discouraging to trade, because you can have nothing more discouraging to enterprise of every sort than the prospect of a continuous fall of prices. 10.258. But in this country you have had that of late years, have you not, concurrently with an immense increase of production ? — No doubt : but at the same time I should think there has distinctly been, since the great fall of gold prices began, a period of great depression of trade and of great slackening of enterprise. 10.259. No doubt in some branches of industry there has been a diminution, but upon the whole has there not been an increase rather than a decrease, I do not say in the value of the articles, because you say the prices have diminished, but in the quantity of production ? — In the quantity of production, yes ; but I should not hold that inconsistent with a de- crease in the activity of trade, because our trade till a few years ago was continually increasing in activity. No doubt the mere increase of our numbers must cause increased production; and, besides, the machinery of production had been set in motion before the depression began. But I should not have thought that there was any question that there had been, relatively, a period of inactive and unsatisfactory trade of late years. 10.260. Turning now to the dislocation as it has been called of the ratio between silver and gold, what observations have you to make ? — I attribute the continuous appreciation of gold to that dislocation. The argument is now so familiar that I need not repeat it in detail. Before 1873 the two metals were in a long established equilibrium ; that equilibrium has Mr. R. B. been lost, owing to the abandonment of silver as a CUa^an, standard of value by most of the civilised nations of ' the world, the eilect of which has beeu to destroy 27 Jan. 1888. the stability of the value of gold, though, as already '_ said, happily not that of silver. At first it was fully expected that the revolution would have the converse effect upon silver ; that as gold rose silver would fall. These expectations have fortunately not been fulfilled ; the value of silver has not fallen ; indeed it has actually risen, so that the evil is confined to gold. The effect upon i^ilver has been beneficial. 10.261. And that evil you would seek to put an end to by restoring in some way or other the old- relation, or the old kind of relation that existed between silver and gold ?— That seems to me the simple remedy if it could be done. The status quo ante is the only remedy. 10.262. Do you think that an arrangement of that sort is practicable ? — I do. Whether it will be cai-rio.l ljut is another question ; but in my belief it could be done at once. 10.263. Do you think that, if done, the different nations who were parties to it could rely upon the others adhering to such an agreement 1 — I have no doubt of it. J cannot think that, if the arrangement were once deliberately adopted, any nation would depart from it. I should think that an international settlement of the question would be likely to be as stable as, or even more stable than, any other international agreement, because, after all that has occurred, the nations would understand how much their interests were involved in preserving the equilibrium of the standards of value. This would be my hope and expectation. 10.264. Have you considered the question of what the ratio should be if it were determined to return to such a system ? — Yes ; but I look upon this as a question for the most anxious deliberation. Still, I may say that, in my present judgment, the original ratio is that which promises the best results. 1 keep my eye steadily fixed upon the one object of stability; and I say that T believe that no other ratio would produce the same degree of stability. 10.265. That is 15^ to 1 ?— Thereabouts ; 15^ to 1 to 16 to 1. A short time ago a reversion to that ratio appeared to me impracticable ; but I think now that perhaps it might be done. Within certain limits any ratio would be better than none ; but the original ratio, I believe, would yield the best results ; so much so that, notwithstanding all the difficulties, I should give my counsel, as now advised, for its adoption, after due notice. 10.266. Do you think that the two metals taken together, gold and silver, would be less subject to variations than either considered separately ? — -Cer- tainly: I cannot imagine any question about it. 10.267. Whatever the subsequent discoveries may be, either of gold or silver ? — That is exactly the object of a composite or compensation standard. Future discoveries of an unwieldly bulk are not I presume to be expected;' but, whatever discoveries may be made, are likely to disturb the value of the two metals treated in solidarity indefinitely less than that of either alone. If it were possible (which it is not) to add a third metal, the prospects of stability would be indefinitely greater still. 10.268. Now what, in your view, to revert to a question that you dealt with a little while ago, what determines the value of gold ? I understood you to say that it was the demaud for and the supply of capital ? — Yes, to be held at call. 10.269. Then if there is a large supply of capital and not much demand for it, would the value of gold rise or fall, in your view ? — The value of gold would rise, as capital would seek that form of investment. The tendency would be to increase the value of gold. There would be greater competition for the stock, which remains pretty nearly fixed. 10.270. And how would its effect upon prices have arisen subsequent to that ? I uuderotand you to say 56 EOTAL COMMISSION ON GOLD AND SILVER : Mr. B. B. Chapman, C.S.I. 27 Jan. 1888. that that condition of the money market checks enterprise and so affects prices ; but would there havt^ been any effect upon prices before that. What is your theory of what would have produced this excess of capital seeking that form of investment ? — I do not think that that has any immediate connexion with my position. From whate\'er cause an excess of capital might arise as compared with the demand for current purposes the effect would be to increase the value of gold ; and an increase in the value of gold is, in other words, a fall in gold prices. 10.271. {Mr. Courtney.) What do you mean by capital in that sentence ? — I explained my meaning in answer to question 10.248, as well as I could, by a concrete case of an individual capitalist with large moneys at his command; the amount that he has at his disposal depends upon the amount that he has in active employment. If the demand for his capital shrinks, thep. his unemployed capital must seek the retreat of gold. 10.272. I do not quite realise now what it was before. What do you mean by capital? At starting you say that capital would seek the form of gold ? — I illustrate the distinction between passive and active capital by tl]e example of the reserves of a bank and the money which it has in active employment, or the reserves of a capitalist and the money which he has in active employment upon enterprises of various kinds, or otherwise employed. 10.273. Then do you mean by capital, balances and debts ? — I would include that, of course ; all the balances, no doubt, of a bank, would be capital in that shape. 10.274. Do you mean anything else ? — I do not refer to tixed capital, houses, and things of that kind. I am speaking of the capital that is available for daily use in carrying on the machinery of society and of trade. 10.275. (TJi£ Chairman.) In fact, prosperous times and an increase of national wealth would, in your view, be likely to appreciate gold ? — No, T should say to depreciate gold. 10.276. But, being busy, everybody has made a great deal of money, which capital fhey want to invest and keep profitably? — Well, when that time came, it would hardly be described as relatively a prosperous time. 10.277. The time may have been of such tre- mendous prosperity that tha.t very fact creates this large amount of new capital seeking employment? — The ultimate result could have that tendency, certainly, but, while prosperity lasts, there is a free demand for capital, and very large reserves do not lie unemployed. 10.278. {Sir John Lubbock.) You said that you drew a distinction between the reserves and the floating balances, but you did not say which you would call capital ? — They are both capital : by capital, 1 mean the whole value held ready for employment upon trade and enterprise. 10.279. Then that would include both the reserves and the floating balances ? — Certainly. 10.280. Then what is the distinction that you draw between them ? — Simply that the pressure upon gold or silver depends upon the share of that cnpital which is held in reserve, or passive, as compared with the share which is in active employment. 10.281. But which is the form of capital which in judgment would influence the your question ? — It is the proportion of the whole which is seeking retreat. It is not the whole amount of capital at all, but when trade is active the reserves naturally diminish and the pressure upon the precious metals diminishes. When trade is dull and inactive the reserves increase, and therefore the pressure upon gold and silver increases and their value rises. 10.282. But in answer to Mr. Courtney, who asked you what capital was, you said you drew a distinction between the reserves and the floating balances ? — I draw a distinction between capital in reserve and that in active employment. 10.283. Then 'if it is in active employment it is already employed and not seeking investment ? — Not at that time. , 10.284. Then it is the reserves that are seeking on- ployment ? — The reserve is awaiting employment or seeking employment. 10.285. Not the floating balances ?— Not the float- ing balances which are employed already. 10.286. {Chairman.) You said some little time ago that you had thought that at the present time it would be impossible to revert to the ratio of 1.5^ or 16 to ], but that you had modified that view and now thought that it would be possible. Would you favour the Commission with your reasons ? — The reason why it appeared to me impracticable was that the great mass of current commercial contracts are of recent origin, and therefore are based upon the relations of the two metals as they stand now, or upon the value of gold, if you please, as it stands now ; therefore, at first sight, it would feem incompatible with justice to revert tar back to a relation or value that has not existed for manyy ears. The difiiculty seemed to me so great that, till recently, I thought such reversion out of the question. But, taking into consideration' the extreme importance of getting to the most stable possible standard, which can be attained only by the use of the best possible ratio between the two metals, and also considering that, perhaps, by postponing the change till after some long notice, the difiiculty might be in some measure bridged over, I should, as at present advised, advocate going back to the best ratio. But it is a most difficult question, if yovi ever get so far as that question, and one to be very carefully deliberated. 10.287. Do you think that the change would be an important one, or would you regard it as indifferent, if you look at the interests of India ? — I am satisfied with things as they are for India; and, in the sole interests of India, 1 should deprecate any chanire. India has now the great advantage of a comparatively stnble standard, and has so far nothing to complain of. The only way in which India is now injured is through the constantly increasing burden of her gold debt. This is a most serious evil ; but I look even upon this evil as of little importance compared with the advantage of a stable standard. 10,2iS8. _(J/r. Montagu.) Would not, therefore, the market ratio of about 20 to 1 benefit India by renderin"- the present state of things permanent, and also make a stable standard between the two countries?— I have never personally been able to see that within certain limits any particular ratio would benefit India more than any other. I can understand that under certain circumstances a rapid ch.auge of ratio mi"-ht affect her, but I do not see in what respect India is either benefited or the reverse by the exchange being at 1 to 20 rather than at 1 "to 15, provided 0}ily that it be stable. 10.289. {The Chairman.) What has been suggested is this, that at present with the silver price the same the gohl price is lower than it would be if the ratio' were 1 to 15^^? — Certainly, it is. 10.290. And that, therefore, the Indian producer can receive as many rupees and sell his produce here at a gold price considerably lower than would be possible if your ratio were 1 to 15^. It is suggested that that gives him an advantage in competition with other corn-growing countries, and that if he had to put up his gold price in order to get the same number of rupees he might not compete so favourably with other countries ? — It has always seemed to me that that really begs the whole question. If the 1 to 15^ ratio were substituted for the present ratio, the rupee would necessarily rise in value, and the Indian pro- ducer would get fewer rupees for his produce. He is getting now nearly the same number of rupees as before, because rupees have not materially altered in value, but he gets no more gold for his produce than he would do if the standard of India were gold. 1 have never been able to see in what respect he gains. MINUTKS OF EYIDENCK. 57 10.291. Do yon tliink that the making the ratio 1 to 155 would bring iiliout a great change in silver prices in India ? — 1 am very mnch afraid that the effect would be to increase the \alue of the rupee, and, therefore, to cause a fall in silver jirices. I should expect this, certainly. The effect of the 1 lo 15^ ratio would be to bring silver np and gold down. As far as it brought silver up it would, in my opinion, be an unmitigated evil. 10.292. {Mr. Montagu.) Why do you pin your faith therefore to that particular ratio of 15^ to 1 ? — Because I believe that, at that ratio, the most efficient possible use would be made of the two metals. And I should hope that if that ratio were re-adopted there would not be so great an appreciation of the two metals together as if you combined them at their present ratio. 10.293. {Tim Chairman.) But supposing your view is correct and the Indian producer would have to take a lower rupee value for his produce, and was still subject to a fixed rupee charge as he would be in many cases of rent and land tax and other charges, would not that make a serious difference in his position ? — Yes, it would make a difference to him ; and I have therefore said that in my judgment it is an undesirable thing for India. If I were advocating the interests of India oidy, I should say India should only consent to any change in her present standard, because she could not help it if the rest of the world wished to do it, and because, if she could, it would be selfish of her to stand out. I should like to repeat that the present value of silver is not at all winit I expected, and t believe everybody expected after 1873, which was that, sooner or later, silver would greatly fall away in value. If I had been a^ked to prophesv in 1873 what the value of silver would be in 1888 I should have said that it woidd have fallen very heavily, virhereas it has even risen a little, and is apparently likely to rise more. 10.294. {Sir T. Farrer.) Fallen against commo- dities ? — Yes, I do not attach any other meaning to value. 10.295. {The Chairman.) And in the same way it may be that silver would not rise so much as you expect if you went back to the old ratio ? — It is possible. Precisely to foresee or foretell these things I believe to be beyond human power ; but it seems highly probable that it must so rise. 10.296. {Mr. Barbour.) You were Financial Se- cretary to the Government of India at the time that the serious alteration in the relative value of gold and silver began ? — Yes. 10.297. And, owing to your official position, this alteration attracted your serious attention from the very beginning ? — Yes ; we bore the brunt of it at first. 10.298. Am I right in saying that at that time there was great ignorance of what had really occurred, at any rate in the first instance ? — I believe so. 10.299. There was an impression that silver was likely to become as cheap as copper, or very cheap, at any rate ? — Some had that impression. 10.300. And a great deal of importance was attached at that time to the Comstock Lode, I believe ? — Yes, very great. 10.301. The belief was entertained that silver would go largely to India, and that silver prices would rise very largely ? — Yes. 10 302. And I believe that in order to discover what was happening, whether gold was rising or silver falling, you, very soon after gold and silver began to diverge in relative value, went to the trouble of having a table of gold and silver prices prepared for diflferent years ? — I did. 10,303. And you found, as early as 1875, certainly in 1876, that what 'was happening was that gold prices were falling, and not silver prices rising, whatever the cause may have been ? — As soon as 1 looked at the subject from that as|)ect I saw at once that that was what was happening. o 54648. 10.304. I think 30U wei'e the first person to point that out ? — Perhaps so. 10.305. {The Chairman.) It is rather important that, according to your observations, as soon as the price of silver fell in relation to gold, the gold price of commodities went down and the silver prices remained stationary ? — The momenf we looked at the prices we found that that was what was happening. 10.306. {Sir John Ltcbbock.) Where ? — Every- where : in England as well as in India. 10.307. {Sir T. Farrer.) And did you notice whether the gold price fell first ? — I cannot say ; but I think it was simultaneous. 10.308. {Mr. Barbour.) Whatever may have been the cause, the fact was that gold prices went down and silver prices remained more nearly the same ? — Y^es. 10.309. And that is pretty much what has happened since; whatever the cause may have been, gold prices have fallen, and not silver prices risen .'—Yes ; and the apparently I'easonable apprehension entertained has never been realised ; silver prices have not risen. 10.310. {Mr. Courtney.) What was the date; not when you mads your observatious but to which your observations ran back ? — The gold figures I took from the Economist. I could not answer as to the exact date, but they went back beyond all the disturbance of the gold discoveries. 10.311. And a fortiori before any of the disturb- ance that these were said to have created ? — We went back to a time of calm, as far as we knew. 10.312. {Mr. Barbour.) And you brought that fact to notice as early as 1876 .' — Yes, I beheve so. 10.313. {Mr. Chaplin.) You expressed the opinion just now that a return to the status quo ante was perfectly practicable in your opinion? — I believe it to be quite practicable. 10.314. And you think such currencies are perfectly practicable and they are within the power of England alone ? — Yes ; I have for a long time believed that, if England would agree to bimetalUsm, the rest of the nations would gladly agree too. 10.315. You mean the other nations of Europe and you include the United States ? — Certainly. 10.316. Are willing to revert to this state of things provided England does ? — That is my strong impres- sion. 10.317. I understand that, on the whole, although you perceive all the difficulties in the way of doing it, that you have come to the deliberate conclusion that the ratio of 15| or 16 to 1 would be the best ? As at present advised I think so; facing all the difficulties. 10.318. In your paper you say that there is reason to believe that the ratio of \6\ to 1 was not far from the actual ratio of the stocks of the two metals ? Yes. In the course of the inquiries which I had to make in India, without at all foreseeing what the result would be, I endeavoured to collect such figures as could be had in regard to the stocks. As is well known, such figures are not worth very much ; but it did so happen that that the ratio which came out was 1 to 16. 10.319. Do you attach importance to the view that with the object of obtaining the greatest stability in the standard the ratio should correspiind as nearly as possible to the actual proportion of the metals ? I do attach importance to it, though not exclusive im- portance : it is to be considered with other things. But, for purposes of stability, I believe a ratio thus fixed would be the best. 10.320. You are of opinion that if it were adopted the value of the rupee in India would rise ? Yes. 10.321. And that, I understand you to sav, in your opinion, would be a decided evil ? — Certainly. 10.322. It would make a difference ty the Indian producer, to the Indian landowner ?— I attach extreme importance to a steady standard, and I think an appreciating standard a great evil that would injure all debtors; indeed everybody. For instniicc, it m'ioht quite conceivably disturb all'our hmd settlements. "" H .Mr. R. B. Chapman, C.S.I. 27 Jan. 1888. 58 EOYAL COMMISSION ON GOLD AND SILVER : Mr. R. B. Chapman, C.S.I. 27 Jan. 1888. 10,323. I suppose that if it did happen, they would he sufferinn; by the rise of the rupee in much the same way as we have been suffering in England from the fall of it ? — Yes, or from the appreciation of gold, as I should put it. But there would not probably be the same extent of rise ; we might expect the meeting to be about halfway. Since ^873, the relative value of gold and silver has changed by about 26 per cent. ]f the meeting were half way, silver would rise and gold fall by 13 per cent. each. 10.324. I suppose that the loss to the Indian landowner or producer would be merely this ; he would lose that which he has actually gained since the dislocation of silver ? — Hardly ; because he has gained actually nothing ; he has been in the happy position of having a steady standard. By what occurred in 1873 he has most probably been saved from a loss which he would otherwise have suffered ; but he cannot be expected to recognise this. There has been no fall in his standard, and, therefore, if it were now raised, a loss would be caused to him for which no compensation would be admitted. 10.325. But did I not understand you to say that they had gained by the fall in the value of the rupee ? — No ; my position is that there has been no fall in the value of the rupee. 10.326. In India itself ? — ^Neither in India nor anywhere else ; on the contrary, the rupee has risen in value. The rupee in England is no longer much as it used to be? — It is worth have already explained that although a rupees turned into gold now would only 71 sovereigns instead of, as in 1872, 96, 10,327. worth as more. I thousand produce 961. yet 71Z. would buy more commodities now than would buy in 1872. 10.328. {The Chairman.) More of some com- modities, that is to say ? — I speak of the general range of commodities such as is contem- plated in the Economises Index of Prices. Mr. Barbour has shown conclusively in the table at p. 92 of his " Theory of Bimetallism," that according to that index the value of silver in London has risen since 1872. 10.329. {Sir T. Farrer.) When you go into Indian prices, you find that the prices of ditferent articles have risen and fallen very largely and in very different degrees, so that it is very difficult to get any average price out of the whole. Is that not the case .^ — Doubtless ; but, if you take a wide enough range, you can form a very good general conclusion. I do not feel any difficulty in concluding that prices have remained very steady in India. 10.330. I think the result of Mr. O'Conor's exami- nation is that, on the whole, the Indian food grains in the interior have rather fallen, that Indian wheat in the interior has rather risen, that Indian wheat at the ports has rather fallen, that Indian cotton has fallen at the ports ; but that at the same time the separate changes in each of the different articles, jate, cotton, wheat, and so on, have been quite enormous ? — I should not have supposed that the changes in prices have been enormous at all. 10.331. His figures show very great variation, according to seasons, and other local circumstances ? — No doubt ; that would be true of many commodities. There are no worse standards of value, for example, than agricultural produce, especially in tropical countries, where the produce is so greatly affected by variations of season. In considering the prices of such com- modities you must take a very wide view, extending over some years ; and, after all, the conclusion whether there has been a rise or fall will remain of the nature of an opinion. I think that such an opinion per- fectly capable of being formed ; but it cannot be mathematically demonstrated. 10.332. It is a very rough average ? — Yes, quite ; but I do not admit that it is not practically true. 10.333. {Mr. Chaplin.) Then I gather your opinion is, that though there might be some loss entailed upon India by the rise in the rupee, yet, in view of the enormous advantage of greater stability to the standard, you would be prepared to run that risk ? — I think we must do so ; and that India could not hold aloof, even if she wished to do so. This question has been treated very much, in times past, as if the interests of India were chiefly concerned ; whereas, my view, in presence of ac- complished facts, is that the selfi-^h interests of Indin would be best consulted by leaving things alone. 10.334. {Mr. Courtney.) Then why, as an old Indian servant, would you bring upon India the damage, which, hitherto, it has escaped, but which wo have suffered ? — I do not wish to bring it ujjon India at all. I am not giving evidence in the interests of India alone. As far as India is concerned, she is, in my judgment, better left alone; but I do not at all think the same with regard to the rest of the world. 10.335. {The Chairman}) You do not think seriously, you mean, of the political difficulty, arising from the necessity, that may arise, of imposing additional taxation ? — Yes, I do. It is a very dis- agreeable thing and a very serious thing ; but it is a choice of evils. The undeserved increase in the weight of her fixed gold obligations is an almost unmitigated loss to India ; I am quite aware of that; I would on no account minimise tlie evil. Bui, then I sliould think the worst possible way of dealing with that evil would be knowingly- to bring about an appreciation of the standard in India, because this would, in my judgment, tend to sap the present prosperity of the country, and might land the Govern- ment any day in greater difficulties. Supposing, for example, that they had to revise the settlements, as might soon become necessary if the prices of agri- cultural produce should take the same course in India that they have been taking in Europe and America ? 10.336. {Mr. Courtney.) And, speaking as an Indian civil servant, you would say, ttiat the change, as a whole, would be injurious to India? — I think so. 10.337. But that India must be sacrificed ?— If the conclusion was arrived at that it was for the general good, it would be quite impossible for India to hold aloof; nor ought she to do so. 10.338. {Mr. Chaplin.') In speaking of the ratio and the desirability of fixing it at 15|- or 16 to one, you said this must not be done immediately, I gathered ? — No. 10.339. How do you suggest that it should be done then ? — It has been, before now, suggested that you could make several steps of it ; alter the value by degrees, first to 20, then to 18, and so on. I believe this to be absolutely out of the question ; but it deserves careful consideration whether the same effect might not be largely gained, if the introduction of the new ratio were announced to take effect after, say, some number of years, three or live years. It seems probable that the effect would then be gradual, and that the hardship inflicted upon all those who had entered into recent contracts would be much mitigated. You could not altogether avoid hardship to them. 10.340. That is that the value of silver would gradually rise ? — Yes. 10.341. What are the great objections to doing it by instalments ? — Because for the time being you would be without a standard on which you could depend ; and healthy trade is impossible without a trustworthy standard. 10.342. What period of years would you suggest yourself? — My suggestion on this point is purely empirical. I said three years, but perhaps five years would be better. 10.343. But that is the mode in which, if started, you would suggest it should be done ? — Yes, that is the suggestion that occurs to me. 10.344. {Mr. Barbour.) You said that India might suffer very severely if the ratio of 15^ to 1 were adopted ? — Yes. MINUTES OF EVIDENCE. 59 10,3-16. Do yon think she would suffer as severely if the market ratio of the day were adopted ? — Eventually probably, just as severely. 10.346. Eventually in what way ? — It might take a little longer, but the effect would still be to raise the standard of value. The object with which even that ratio would be adopted, if it were adopted, would be to cause gold to cease appreciating and possibly to depreciate. 10.347. And you think the change would ultimatv;ly appi-cciiUe silver ? — It would appreciate silver still, 10.348. But you would say that, supposing a fixed ratio between gold and silver is not adopted, following your line of argument, the appreciation of gold must have a still more serious effect on England in course of time? — Yes; certainly. 10,340. And is there not a risk that whether England does anything or not, that ratio of 15| to 1 may be established by foreign countries ? — Yes. 10,3.50. That being the case, the longer the deliiy in adopting some ratio, the more India would suffer when the change was made ? — There is no advantage to India in the postponement of the measure if it is eventually to be done. 10.351. {Sir T. Farrer.) To understand distinctly what your idea of the value for gold is, is it that when capital finds nothing else upon which to employ itself with advantage, it then seeks gold as an investmeut? — Yes, indirectly; it need not take that form directly. 10.352. But that when the banks find that they cannot lend their money to advantage for com- mercial purposes, or upon permanent enterprises, then they invest in gold ? — Ye?. 10.353. That, in fact, it is something like the hoarding that takes place when people do not find means of employing their money ? — Exactly, in character, the same as hoarding. 10.354. {The Chairman?) I am not quite sure that I understand why, in your view, the silver prices •should fall in India if you make a change to 165 to 1. They have not risen as the cliange has come from \b\ to 20 or 21 ; why should they fall if simply the reverse process went on ? • — The facts show me clearly that, but for what occurred in 1873 prices would have greatly fallen in India before now; that the rupee has only been prevented from rising by a happy accident, not the thought or intention of anybody. In consequence of what occurred in 1873, silver has been relieved from a certain great weight of duty that it had to perform, with the result that the rise which would by this time certainly, have taken place, has not taken place. 10.355. Why should it have taken place ? — Because if it be admitted that the effect of the demonetisation of silver in 1873 was greatly to reduce the pressure upon silver, it seems certain that, but for that demone- tisation, the value of silver must have been higher now than it is, and must rise if you reverse that demonetisation. 10.356. Of course that altogether depends upon whether the value of silver would have been higher ? —Yes. 10.357. But what I was rather suggesting for con- sideration is, whether, the fact being that, notwith- standing this change made in the monetary arrange- ments in 1873, silver prices have remained the same, and gold prices have fallen, when you reversed that process the silver prices might not remain the same, and the gold prices rise ? — I did not know that anybody doubted, that, if there should be a reversion to the statute quo ante, the movement would not be only on the side of gold. I thought the purpose and object and working of the movement would be that the two metals should meet at some intermediate point ; that is, that silver would increase in value, and gold fall. 10,358. 1 know some people have stated, theoretically, that it would ; but is it perfectly certain that it would ? It looks a tempting view, that you bring them together and they meet half way, but practically, is it certain that it would operate in that way ? — To my mind it is quite certain that the effect would be that you would relieve gold at the expense of silver by restoring to silver a certain share of the duty which has been taken from it and thrown upon gold. If you do not relieve gold you would not help gold. If you do relieve gold it can only be at the expense of silver. 10.359. I am not quite sure what you mean by relieving gold? — Eelieving gold from the additional pressure which has been put upon it since 1873, a very much larger share of the common duty being then imposed upon it thau it bore when the two metals were in the equilibrium then disturbed. 10.360. And what do you suppose would be the effect of relieving that ■ pressure. How would the relief of pressure showitself ? — In thefalLof the value of gold. 10.361. You assume, then, that to restore bimetallism will raise all prices ? — It would cause a rise of gold prices and a fall of silver prices. 10.362. And how do you imagine that that rise in gold prices would come about by a relief of pressure V — I cannot think of any more concrete way of putting it; but as I am convinced that gold has risen enor- mously in value in consequence of what was done in 1873, so I am convinced that it would fall if the steps then taken were retraced. 10.363. That is exactly one of the most contro- verted questions that we have had before us. A great many people have said it has not risen on any such account at all; that it has risen in relatiou to commodities, no doubt because commodities have fallen so tremendously by an enormous increase in bulk in relation to gold ? — I do not know that I could usefully enter into any controversy about that. I do not doubt that these other influences may have pro- duced great effects ; but it is to me quite inconceivable that gold has not largely appreciated in consequence of what took place in 1873, and that what was then done is not a vera causa of the subsequent fall of gold prices. I should have no hope of being able to con- vince anybody who doubts this, that prices would now rise if the loeasures of 1873 were reversed. If what was done in 1873 produced no evil results, obviously nothing will be gained by undoing it. 10.364. But it may have produced evil results. There are some people who think, aud have put before us, the ^■iew that a dislocation, as you call it, in the relation of gold and silver is a very undesirable thing, and that India, especially in some respects, suffered from it. It is a question entirely independent of the consideration of whether we suffer because there are low prices ?— But the dislocation shows itself precisely in those low prices. The appreciation of gold is only another name for the fall of gold prices. What else is it? I cannot conceive of an apprecia- tion of gold without a fall of gold prices. 10.365. But what is suggested is a constant variation jn the relation between silver and gold, and therefore in the relation between silver and gold prices, aud the transactions between sih er and gold using countries ? — There cannot be constant variations in the relations of silver and gold without constant variations in the prices, m.easured in one or both metals ; therefore you come back really to the same issue. 10.366. Then the evil you wish to remedy is low prices, and you wish to remedy it by making them high ? — No, it matters little whether prices are low or high, if they are only steady. I ha\e not the least wish to make them high ; I should be quite content with prices as they are, if they were steady. 10.367. But suppose you make your standard as stable as you like. If there was not the same produc- tion and the same demand for commodities, how would you make prices steady ? — Certainly you can- not have unchangeable prices, and prices are affected by many things ; but I thought that the recent con- tinuous fall of gold prices was a recognised evil, for which it would be desirable, if possible, to discover some remedy. Personally I would rather have prices H 2 Mr.R.B. Chapman, C.S.I. 27 Jan. 1888, 60 ROYAL COMlVtISaJON ON GOLD AND SILVER : Mr. It. B. Chapman, C.S.I. 27 Jan. 1888 steady and low ; but the one thing that is needful is some moderate degree of steadiness; and it is better, for the encouragement of trade, to have the tendency to change, if any, rather upward than downward. 10.368. {Sir T. Farrer.) With, regard to the demand upon gold, upon which you have been speaking, you think, do you not, that in bad times, when there is not much employment fcr capital, there is an increased demand for gold for hoarding pur- poses? — An increased demand for hoarding. 10.369. That makes gold more valuable, and helps to depress prices ? — Yes, it does. 10.370. So you would say, first of all, that what was done in 1873 made an increased demand upon gold for currency purposes ? — Yes. 10.371. But that produced depression of trade ? — Yes. 10.372. And that that again, in its turn, meant an additional demand for gold, and so that we go on in a vicious circle ? — Yes, that is the nature c>f the pro- cess in my judgment. 10.373. {Mr. Fremantle.) You said you thought there would be no objection to return to the status quo ante ? — Yes. 10.374. But the status quo ante was au agreement, was it not, between certain nations of Europe, and not between all the nations of Europe, and without the United States ? — Yes. 10.375. Then should you see any difficulty in returning to that condition of things ? — I would a great deal rather go further. I consider that, al- though the question describes the state of thing.s quite correctly, yet, owing to the nature of the cirfcumstances, the effect of that agreement did include all nations. It influenced the English sovereign and the Indian rupee as much as it did the French five-franc piece and the French napoleon. But, to make the remedy complete and permanent, it is greatly to be desired that England and America should formally adhere lo any agreement made. 10.376. What would be the reasons you would give for the United Stales and the United Kingdom joining in such an agreement ?- — For the sake of getting a stable standard, which I consider to be really vital. 10.377. But is it not contended that there was practically a stable ratio between gold and silver before 1873? — So there was no doubt; and we might be content with that status quo ante if it were attainable. Personally, however, I have not the least hope that France will again undertake the duty she then relinquished unless England and America agree to join her. 10.378. What would you consider to be the special reasons why the United Kingdom and the United States should join now, when they were not parties to the agreement before 1874? — The special reasons I should say, are that they have now learned, by hard experience, the mischief that follows from an unstable standard. My apprehension is that, if no 'remedy is applied, they will learn it in an aggravated form. Should they awake to this, they would see ample reason for endeavouring to promote a re-establish- ment of that status quo ante of which there is really no practical hope unless they agree to join in such le-establishment. 10.379. What do you thiok would be the effect upon this country of the establishment of a fixed ratio between gold and silver ? — England being the country most interested in trade, would benefit by it more than any other nation. I believe there is no country more deeply interested in getting the most stable standard that is possible than England. I would add that my belief is that England originated the whole disturbance, for England first departed from the bimetallic standard and adopted monometallism. It was that action of hers that eventually brought about this evil. 10;380. But you would maintain that that action had no effect between 1816 and 1873 ? — No ; because the Latin Union law was strong enough to neutralise it. But it was a bad precedent, and led to all sorts of jeulousies and misunderstandings. 10.381. {Sir John Lubbock.) You stated in your evidence and also I think in the paper which you have been kind enough to supply us with that, in your opinion, gold and silver are linked together even now ? —Yes. 10.382. Then you go on to say further "that if this " be doubted let us consider what has been the effect " upon the value of gold, of the dethronement of " silver from the position of a standard in Western " Europe and Anglo-Saxon North America, and what " would be the further effect of its dethronement " throughout the rest of the world" so that they are not if I understand you really linked together in the ordinary sense, but rather like the two weights in a balance ? — I do not know whether the expression " linked together " is scientifically exact, but what I mean is that the value of each of them depends upon the same causes. They share one common field of employment between them, and thei-efore the value of one cannot be altered without affecting the value of the other. 10.383. But does not that apply to all commodities ? ■ — Yes, but what distinguishes gold and silver in this respect from all other commodities is that thej have one common and, in my judgment, one only employ- ment. They are competitors for one field of work. 10.384. At any rate when you said they were linked together you did not mean that they went up and down together, but if one goes up the other goes down ?^Quite so ; that if you could wholly demonetise silver the value of gold would rise enormously at once. 10.385. Then you say the whole amount of the pre- cious metals used in arts and manufactures is not large. You are aware that it is estimated that of an annual production of 43,000,000/., no less than 17,000,000/. is used in arts and manufactures. Do you dispute that statement? — No, I do not dispute the figures, but I should say that a large quantity of that still practically represents value. For instance, those fiijures would probably include all the jewellery in India, which is often as much money as if it were held in a banker's vaults ; and matters of that kind. It would be difficult, perhaps, to specify a single article of gold or silver in which there is not at least some thought of its intrinsic value. Then, besides that, I do not myself attach very much importance to the current accretions to or decretious from the whole stock. 10.386. Then when you speak of the amount used in arts and manufactures not being large, do you mean to exclude what is used as jewellery ? — Not exactly ; but I had in mind that jewellery is largely held in the East as a mere form of hoarding, and that a large portion of the precious metals held in the form of jewellery, may have something of the same character elsewhere. 10.387. Then I think you said that the fall in prices was a discouragement to trade, and you spoke in support of that of the very inactive trade of recent years ? — Yes. 10.388. But are you aware that while our exports in 1876 were 267,000,000, our exports in 1886 even at the lower range of prices had gone up to 267,000,000 ? —Yes, and I am very glad of it ; but if the figures were carried back 10 years, you would find the rate of increase very small, bearing in mind the great increase of population and the great increase of plant. I have followed those figures closely ; but I should still think that there was no question that the trade of late years has been inactive and unsatisfactory. [ am sure it has been so to very many. 10.389. Then although, notwithstanding the fall of 25 per cent, in general prices, the amount of trade has shown an actual increase, you would call that an inactive trade as compared with previous periods ? — Relatively so ; it is in some respects very gratifying that it should be so good, but relatively to what it would be and relatively to wliat our merchants look for it is depressed. MINUTES OF EVIDENCE. 61 10,390. Then you call the trade inactive though it was larger ? — That seems to me hardly a fair compari- son ; though if I said that it was inactive compared with what it would have been if compared the progress had gone on at all as it was goino-, it would be con^tlered an unfair comparison in the other direction. 10.391. (27ie Chairman.) Does not this rapid pro- gress rather tend to a condition of depression after- wards ? — Yes, I quite admit that my argument is only of the nature of a tendency. 10.392. {Mr. Montagu.) You desire bimetallism at \5\ to 1 in order to promote our trade and to reader prices fairly stationary with a risina: t<^n(lenc-''? — Tes. 10.393. You admit that reverting to the old ratio would injure India ? — Yes. 10.394. Why then would not a ratio of 20 to 1 settled, say, for 20 years give all the advantages you desire and avoid the disadvantage of injuring India ? With the exception of that little parenthesis, -' settled for 20 yenrs," I should say it v\ould pi-obab'vdo a very great deal. It would very nearly do the whole thing. As between 20 to 1 and 15| to I, it becomes a some- what delicate difference. Personally, I believe the relative advantage of 15| to 1 would be worth all the additional risk and trouble ; but if you could fix 20 to 1, the main thing would, no doubt, be done, 10.395. Would not 15^ to 1 encourage silver while 20 to 1 would not ? — No ; I do not think so. I think the fixing of any reasonable ratio whatever would encourage silver mining equally. 10.396. Would not silver at os. an ounce encourage silver mining more than silver at 4s. an ounce ?• — It might to some extent; but the main thing would be the certainty. If silver got a certain reasonable share of the field I do not think it would much matter. 10.397. Have not mines gone out of work in consequence of the depreciation of silver .' — I presume so. 10.398. Therefore they would resume work ? — Very likely ; and, for my part, I should think it most desir- able that they should ; for, the prospect is not of a glut of either gold or silver, but of a production insufficient to prevent their value from, in the course of time, appreciating. 10.399. Would not 15^ to 1 cause so important a change as to encourage hoarding of gold, say, in India or other parts of Asia, which would not be the case with 20 to 1. The sudden drop of gold in India might induce purchasing and hoarding ? — It might do so ; but I should think that too remote a danger. It would not influence me. 10.400. ( Mr. Chaplin.) Are you not of opinion that certain interests in England — industrial interests in this country — have suffered severely from the depre- ciation of silver ? — Do you mean to say by the change in the price of silver relatively to gold ? 10.401. Yes? — If you put it tho other way, the only way I admit, an appreciation of gold, I have no doubt of it. 10.402. Well, I should have called it perhaps the demonetisation of silver ? — I have no doubt whatever that the appreciation of gold or the great continuous fall of prices has much injured many interests. 10.403. Then, if the ratio were fixed at 20 to 1, that would perpetuate the loss, whatever it is, that has followed from the fall of the ratio from 15^ to 1 to 20 to 1 ? — I do not think that follows. I think if stability was obtained the particular ratio would not, comparatively, matter. If prices were only steady, things would adjust themselves. The great evil is the continuous fall of prices, when there is no bottom, and nobody knows what to do. 10.404. Still, if a loss has followed upon a fall of the ratio from 15| to 1 to 20 to 1, and you make the ratio permanent at 20 to 1, is not that perpetuating the loss .? — No, if what caused the evil was not the lower level but the fall. 10.405. You mean there woidd be no fiuther loss ? Yes ; you could not recover past losses. 10.406. Exactly ; that ii what I meant to arrive at, that the loss then, that you have already sufl'ered, would be rendered permanent for ever ? — You cannot recover past losses ; but I do not think that a low range of prices necessarily involves loss to the producer if he can only trust their stability. 10.407. Would not there be a great and, possibly, an insuperable difficulty ou the pai't of foreign nations in fixinr the ratio ut 20 to 1 ? — Yes, there would be : that is one of the considerations upon which I oot. elude that it would be better, on the whole, to go to 1 to 15^. 10.408. Yo8 consider that to be most serious? — A most serious practical difficulty ; almost insuperable, I should fear. 10.409. (Sir John Lubbock.) In your memorandum you say, ' All rises in the value of the piecious metals •' draw capital from active employment, aggravate ' the rise in that value ; " would you kindly explain what you mean by the rise in the value aggravating the rise ? — I cannot better express what I mean than Sir T. Farrer did just now when he suggested the description of a " vicious circle." What I meant was this, vrhatever it is worth ; supposing the value of gold to rise, that tends to draw capital to the inactive form of the gold reserve ; that again causes gold to rise still further. It is such a vicious circle thai I meant; but I perhaps expressed it too curtly. 10.410. Tlien you mean that it is withdrawal of capital that aggravates the rise ? — Yes. 10.411. Kindly give us some illustration of how the rise in the value ot' the precious metals causes the withdrawal of capital from active employment ? — Supposing, for example, there was a question of a capitalist entering upon some enterprise, and he had as an alternative to let his money lie idle in the shape of gold, or to invest it, say, which really comes to the same thing, in some gold-bearing securities bearing a low rale of interest, I should expect him to take into pracrical consideration the question what his gold would be worth at the end of two or three years, as compared with what the return would be from the enterprise competing with that retreat of his gold. 10.412. Do you consider that there is at the pre- sent moment any great increa.se in the capital lying dormant as compared with 10 or 20 years ago? — I can only answer that question by saying that what makes me think so is the abundance of money and the low rate at which capital can be had. That seems to me to show that there is a great increase of capital awaiting employment. 10.413. You mean the low rate of interest ? — Yes, 10.414. Where is that capital at the present moment? It does not show itself in the returns of the banks ? — I cannot tell you. 10.415. Then you mean that a priori you think it is there ? — I am sure it is there. I am sure that a very small addition to the market rates would bring it from all parts. 10.416. You are sure it is there, but you cannot point out where it is ?— No, I cannot point out where it is. 10.417. Then you stated in answer to Mr. Chaplin, that you thought the ratio of value between the two metals, gold and silver, should be the same as that of the stocks, if I correctly heard your answer ' —Yes. iC,118. But do you mean to imply that there is any such ratio as 20 to 1 between the stocks of gold and the stocks of silver ? — No, I do not. When I gave those answers I was all along arguing for the 1 10 15^ or 16 ; that is the ratio which, I believe, is as nearly correct as we can discover; but i am aware that such figures are to a large extent hypothetical. 10,419. But I thought that the general estiraaLe was that gold was about 1,500,000,000, and silver something under 2,000,000,000?— I was speaking of weight; my inquiry in 1880 brought out 11,200,000 kilos gold and 179,200,000 kilos silver, or about 1 to 16. Mr. R. B. Chapman, C.S.I. 27 Jan. 1888. 62 EOYAL COMMIKSION ON GOLD AND SILVER : Mr. R. B. Chapman, ■a.s.f. 27 Jan. 1888. 10.420. Then if the rest of the world is so much in favour of bi-metallism, as you appear to suppose, why should uot they adopt it without us. After all, we are only a very small portion of the population of the world ?^-That is quite true, but we are a very impor- tant portion, and a portion which is, I fear, regarded in some quarters with bitter jealousy. 10.421. But if it is an advantage to them, why should not they do it because we foolishly deprive ourselves of the same advantage ? — I think they would be very wise to do it, and they may do it ; but I have no expectation that they will do it, because national sensibilities count for a great deal in such matters. I fear they would look upon it as if we -were employing them as the cat to pull our chestnuts out of the fire. 10.422. You mean that they would not regard it as a benefit unless we entered into it also ? — I do not mean that; the impression which I have gathered from all I have read on the subject is that they distinctly wish it, and regard it as a benefit; but that they will not do it unless England takes the lead, or at least concurs. Whether they ought so to wait upon us, is quite another question. 10.423. It has been estimated that at present the population of silver-using countries is, speaking very roughly, about 800,000,000 of people, and of gold-using; something under 150,000,000 of people. Do you consider, then, that it would tend very much to the stability of prices if instead of the 800,000,000 using silver, and the J 50,000,000 using gold, the whole 950,000,000 used both gold and silver ?— The figures which 1 quoted in answer to question 10,243 differ from those you state ; and I should think you much understate tlie population using gold, which, speaking roughly, includes the whole Anglo-Saxon race, and a very large majority of the Latin, Teuton, and Scandinavian races ; but in any case it is submitted that this is not a case in which you can count by heads. By far the greater part of the wealth of the world belongs to the gold- using minority, and their action in this matter would produce results far exceeding those depending upon the action of the silver -using majority, 10.424. That was not my point. I could quite understand that the exchange between the gold-using countries and silver-using countries might be rendered more stable by the adoption of bi-metallism ? — Yes. 10.425. But my question was, and it does not turn upon exact numbers, whether you think prices as a whole would be more stable by the combination of the two ? — I have no doubt whatever about it ; because, taking your figures as sufficient for the purpose, supposing the 150,000,000 were to take to silver and just simply change over, I cannot for a moment doubt that the eifect would be an enormous rise in the value of silver, and a very great fall in the value of gold. Numbers counted by heads are, I think, of no importance. 10.426. Would not that depend upon the ratio at which bimetallism was adoiJted ? — It would, no doubt, in part; but, whatever the ratio within reason- able limits, I think my answer would not be modified. It is this, that the 150,000,000 includes all the wealthy part of the world. In its effect upon the value of the metal that it used, it is beyond all comparison more important than the rest of the world. 10,42'7. On the other hand, is it not the case that the economy of banking e.vpedients, and so on, in more highly civilised countries renders them more independent of the use of precious metals as coin ? — Certainly ; but I should not expect this in any way to modify the enormous influence that their adoption of one or other of the metals would have. 10,42o. If bimetallism were adopted at the ratio of 15i to 1, do you not think that the result might be to drive gold out of circulation ? — It might be so ; I should not attach very great importance to such a result if it did so, so long as the gold was there as a standard. I should not particularly expect it. 10.429. If you lowered the value of gold in relation to silver and raised the value of silver in relation to gold, as you have just aiid that you thought this would do, the result of course would be, would it not, to encourage silver mining and discourage gold mining ? — Yes, for the time, 10.430. Therefore it would increase the production of silver and diminish the production of gold ? — Yes, that would be the tendency. 10.431. And the relative value of gold to silver in the west being now 20 to 1, if you adopt a standard of 15^ to 1, would not the probable result be that gold would gradually go out of use for money ? — I think it might ; but, I repeat, I have never been able to see that this would much matter. We want the standard ; it would remain there as a standard. I think it very likely might, and, in fact, I would go the length of saying that it is almost desirable that it should go out of circulation, in order to the economy of the more valuable metal. 10.432. Then in that case does it not follow that practically what you would come to would be that you would have a standard consisting of silver alone ? — No ; I cannot see that ; the standard would be none the less gold, though you never saw a sovereign. 10.433. Quite so, but if gold was worth more and went out of circulation, though it would be nominally a part of the standard, practically the whole range of prices would depend upon the value of silver ? — No ; bimetallism would only link the two together. The gold would affect silver quite as much as the silver would affect gold, perhaps, indeed more so. 10.434. But you have just expressed the opinion that very probably the result would be that the cir- culation would become a silver circulation. In that case the option that the debtor would have to pay his debts in gold, which would be worth more, would practically have no effect upon prices ; they would be regulated by the cheaper metal, would they not ? — Yes, but the price of the cheaper metal, the value of the cheaper metal, would most certaLuly be regulated in its turn by the gold. 10.435. Then your contention is, that although the gold might have gone out of circulation, and might be so valuable in proportion to silver, that practically it was not used as money, still prices would not be regulated solely by the silver, but that gold would also have an influence upon them? — 1 am sure of it. I cannot admit that the gold would be of no use, even although it disappeared from circulation. It would be ready to come in at any time on the turn of the relative value of the two metals, and so would eSectually prevent silver rising beyond a certain point. 10.436. You consider that it would still have an effect upon prices ? — Most certainly, in my judgment. 10.437. (3Ir. Courtney ) Following that up, con- ceive this very strong supposition, that five ounces of silver should be the same for the payment of debt as one ounce of gold, what effect would that have on the maintenance of gold as a part of the currency ? — I have never thought of it, but I should suppose that most likely gold would disappear from tlie currency. 10.438. Disappear altogether ? — It would be there ; but it would not jsass from hand to hand very likely. 10.439. Nobody would ever dream of paying a debt in gold ? — I should think very likely not. 10.440. Under the present conditions of gold and silver mining, it is almost inconceivable that gold should be capable of being procured so as to be cheap to pay a debt in gold when you can pay it in live times its weight in silver? — Quito so. 10,141. Gold would practically disappear ? — Quite so. 10.442. In that case would the prices have any relation whatever to gold ? — Well, you are considering an extreme case. 10.443. That is the way to test it ? — No, I do not think it is. I am not aware that anybody in his senses has evei- advocated such an extreme ratio. MINUTKS OF liVJDKNOE. G3 When bimetallism is advocated it must be always within certain limits. If you ask whether, by any form of legislation, gold and silver — take a still more extreme case — could be made to circulate on an equality, weight for weight, then I shoultl answer certainly not; it would be quite out of the question. There must be a certain reasonableness in the ratio ; which I find in the relative proportions, the relative stocks of the two metals. If you depart too widely from that proportion I quite agree with you that it ■would be impossible to combine the two metals to make one standard. 10.444. Would not this suit you ? You must have such a ratio established that it would be still worth while to work some gold mines ? — -Tes, certainly you must. 10.445. Put the gold on a market? — Yes, surely, I have never attempted to find out at what ratio bimetallism would cease to be possible, but I freely admit that the ratio must have some relation, and not too distant a relation, to the relative stocks of the two metals. 10.446. {Sir John Lubbock.') But you expressed the opinion that the effect might be to press the gold out of ciriiulation altogether ? — It might do so, I think, as the more valuable metal. 10.447. And yet I understand you to express the opiniou that, practically, although no gold may be coined or in circulation, yet the gold would have an influence upon prices ? — Yes, I am clearly of that opinion. 10.448. {Mr. Courtney.) 1 thought you gave that up in the extreme case ? — Yes ; but I submitted that in such a case as this you could not wisely argue from extreme cases. 10.449. {Sir John Lubbock.) If there is no gold in circulation why need the case be more extreme than in the other ? — Perhaps I ought to say with regard to gold going out of circulation that it is a subject I have not thought particularly of, and as I say, I do not myself attach much importance to it ; but although gold were not in circulation, directly silver got to a certain price it would bring gold into circula- tion ; that is how it would influence prices even though not in circulation. 10.450. But your contention, as I understand it, was that it would be an enormous benefit to trade and commerce, to have a bimetallic arrangement instead of monometallic arrangement, because it would give stability to prices ? — Yes, certainly, 10.451. Then I asked you a question whether, taking the ratio of 15^ to 1, the effect might not be to drive gold out of circulation altogether. You said very probably, that you thought it would. Then I asked you whether, in that case, prices would not depend entirely upon silver ? — That I deny ; because there is gold behind ready to come in the moment silver prices went up high enough to bring it in. 10.452. {Mr. Fremantle.) Is it not the contention of a great many bi-metallists, M. Cernuschi among others, that under a system of bimetallism there could not be a cheaper metal or a dearer metal ? — -Quite so ; sub- ject always to this general condition, which I suppose M. Cernuschi would admit, that the ratio adopted must have not too distant a relation to the relative stocks of the two metals. 10.453. {Sir John Lubbock.) You said gold would have an effect . upon prices, because gold would be behind, and might be called in when prices rose sufiiciently high ? — It would immediately and auto- matically so come in. 10.454. But until prices rose sufficiently high to bring gold back into circulation, you would admit that it had not the same effect ? — It would always so operate. Where bimetallism prevails the value of each metal is absolutely affected by that of the other. 10.455. Yes, but we come to a condition of things in which it does not pay anybody to send gold to be coined, because they coiild use it in the arts to greater advantage, then do you really maintain that the theoretical power of a debtor to pay his debts in the more precious metal would have any effect upon the prices ? — Unquestionably it would in my judgment. The case supposed is an extreme one which I find it difficult even to conceive ; but, if it should occur, the value of silver would at once rise until it was worth while to bring gold in ; and the option of so bringing in gold must surely prevent silver rising in value more than a very little above gold ; in other words, must effectually regulate prices. 10,456. I quite agree witli you that when the prices rose sufficiently to bring gold in, then gold would have an influence, but I should be glad if you would explain to us a little more clearly how the gold would have an influence when it was not in circulation and when it was at a price which made it undesirable for anyone to have it coined, and when, therefore, no debtor would be likely to pay his debts in it? — I think I can best explain it by asking you to consider what would happen if the option of paying in gold were altogether withdrawn. It is obvious to me that then silver prices would rise indefinitely. If I am wrong my argument falls. If I am right, then it seems clear that the option in reserve of bringing in gold must, at every turn, influence the silver prices, because silver has not got the field to itself absolutely, but always subject to gold coming in the moment it is advantageous to debtors to bring it in. 10,457. {The Chairman) I understand your view as to the effect in raising the value of gold of an inactive state of trade and consequently your reasons for saying that of late years gold has appreciated on that account, but I did not quite understand your view of how that first started. The inactive state of trade you trace to low prices, and theu these low prices react through this inactive state of trtide again upon the value of gold producing lower prices. But how do you think it first started ; where did it first touch prices ? — When gold was first appreciated owing to what occurred in 1873 ; but I should not like to be understood to mean that the only cause of low prices was the increased pressure then thrown upon gold. 10.458. I was not suggesting that ? — The prices were lirst affected when gold and silver parted com- pany in 1873. 10.459. Yes, but how did that affect gold prices ; what was the practical operation ; where did it first touch gold prices ? — I am not prepared with any useful answer to that question. 10.460. You have not given special attention to that point ? — I have not thought it out. I have always dealt on this question with the facts. About the fact that gold has appreciated, or in other words that gold prices have fallen continuously since 1873 I have no doubt. As to exactly where or how the evil first began to operate, I can give no useful information or opinion. 10.461. {Sir John Lubbock.) You said once or twice in your evidence that in your view the fall in prices was indentical with the rise of gold ? — In my view it is absolutely the same thing. 10.462. But do you not think it makes a great deal of difference whether the fall in prices was due to increased economy or facility of production of the article itself, or to any alteration in the value of the gold ? — It might make a considerable difference in deciding what action to take. I do not think it makes any difference as to the fact. 10.463. It makes a great deal of difference in the result ? — I think that before any remedy is adopted, the causes should be carefully considered. 10.464. Now, as matter of fact, you referred to the index number. Let us take iron. Do you think that the fall in the price of iron is due to an alteration in the value of gold, or to increased economy and facility in the manufacture of iron, or to both? — I have no doubt that the decreased price of iron is in large part due to the appreciation of gold, though not to the exclu- sion of other causes. But I would respectfully submit that no useful result will be obtained by any attempt to assess, the various causes contributing to the price at any moment of any particular commodity. Mr. It. B. Chapman, C.S.I. 27 Jan. 1888.' 64 ROYAL COMMISSION ON GOLD AND SILVER: Mr. R. B. Chapman, C.S.I. 27 Jan. 1888. The question of valurs is so complex and wide that it cannot, I submit, be deiilt with article by avticlo. It must be denit with p-enerally. 10.465. Yes, but I put it to you in that way because it makes a very material differonce in our considerations. We have had several witnesses who have given us reasons for considering the alterations in ihe price of sugar, iron, wheat, and other large articles have been due very much to the increased facility of production and of carriage ? — Yes, no doubt they have. 10.466. You have pleaded in your evidence to-day as if, in your judgment, it was mainly due to an alteration in the value of gold ? — I do not think I have even said mainly. I was dealing only with the standnrds of value and the causes which had disturbed their stability. T was not considering, and in my evidence I have not considered, whether any causes have disturbed the values (not prices) of commodities in general. No doubt there have been such causes, and I cannot say that, in som.e instances they have not contributed to the fall of gold prices as raucli as has the increased pressure upon the standard. But, whatever may have been the influence of those causes, I am confident that the increased pressure upon gold is the true cause of a very large [lart of the fall of prices. 10.467. Well, then, take the period during which there has been a fall roughly of, say 20 per cent., in the largest articles ; can you give the Commission any idea as to how much of that fall is in your opinion due to the chat.ge in the alteration of the articles themselves, and how much represents the appreciation of gold? — I do not know that I can quite put it in that way, because the whole of it is appreciation of gold. If you ask how much is due to increased production and how much is due to the transfer of duty from silver to gold, I can only refer you to the fall in gold prices, and the comparative steadiness of silver prices. 10.468. {The C/irdrman.) But may not some of it be depreciation of commodities ? — It may be my stupidity, but I have never been able to understand The witness how one balance can go down without the other {^oing up, or how it could be said that the equilibrium is disturbed more on the one side than on ihe otiier. 10.469. You have the scales even, you put more into the commodity scale, and the additional weight would turn the scale ; one goes down and the other goes up. You put so much more into the commodity scale ? — But as regards the fact, the one is up as much as the other is down ; that is the fact. 10.470. (Sir John Lubbock.) But sve have evidence that iron can be produced much more cheaply than it could be some years ago ; and that the cost of carriage of wheat from Chicago is as much as lOs. a quarter less than it was. You have expressed your opinion very strongly that there is an appreciation of gold owing to curreuey changes in different com- munities. You have aho, 1 think, admitted that part of the change may be due, and probably is due to an increase in the economy of manu- facture and the facility of carriage. What I wish to elicit from you is whether you have formed any impression as to how much of the change was due to the one cause and how much to the other ? — No, I do not think I could give you any useful opinion ; I have no means whatever of forming a judgment. I would only say that, even if it could be proved that the whole of the recent continuous fall in prices were duo to causes not aflecting the standards of value, and that no part of that fall were due to causes affecting the standards, — a hypothesis which J need hardly say in no way commends itself to my judgment — still, even upon that hypothesis, the stability of your standard has been destroyed as much as if the converse hypothesis were established, and the necessity of a re-establishment of its stability is none the less urgent. The present instability, however it has been caused, is nothing short of disastrous. 10,471. Still you are not prepared to express any opinion as to how much may be due to a change in the commodities themselves, and how much to a change in the gold ? — No, I can give no useful opinion on this point. withdrew. Adjourned. FORTY-EIGHTH DAY. 8, Richmond Terrace, Whitehall, S.W. Monday, 6th February 1888. Mr. £, Satsoon. 6 Feb. 1888. PRESENT : The Right Hon. LORD HERSCHELL, the Chairman, presiding. Me D. M. Barbour, C.S.I. | Sir T. H. Farrer, Bart. Me J. W. Birch. | Mr. C. W. Fremantle, C.B. Mr. Heney Chaplin, M.P. | Mr. S. AIontagu, M.P., and Me. L. Courtney, M.P. I Mr. Geo. H. Murray, Secretarij. Mr. Edward Sassoon called and examined. 10.472. {Chairman.) You have been engaged in commerce between this country and India ? — Yes, my lord. 10.473. And have directed your attention to the depreciation of silver which has taken place during the last few years, and to its efiects upon the trade between the two countries ? — Yes. 10 474. What observations have you to make with i-espe'ct to its effect upon the development of the export trade of silver-using with gold-using countries ? — I think myself that to attribute the development of the export trade of India with gold-using countries to low silver is altogether a fallacy. On the other hand, I admit that during each successive fall in exchange that is to say, during the period that exchange fell and gold prices in England had not had time to respond pari passu to the fall, then I admit that a sort of bounty was provided, inasmuch as the exporters from MFNUTES OF EVIDENCE. 65 India were ciuiblwl to lay (lo\vn tlic whotit cheaper here than before ; but in these days of telegraph and rapid means of communication I think that the opera- tion of that boimty could only have been very short- lived and transitional. 10.475. You think, in short, that the gold prices here so quickly respond to a fall in the relative value of silver to gold that anything like a bounty is so short-lived as to bs undeserving of consideration ? — Certainly. 10.476. Then -with regard to the development of export trade with silver-using countries, what have you to say ? — Well, the same remarks apply that I have just made with regard to the downward course of silver, that during the fall of silver a sort of bounty was also given to India for all her manufac- tures which enter into competition with the products and manufactures coming from gold-using countries ; but, as I was saying just now, as things get practi- cally adjusted they are automatic. Now, with the telegraph and other facilities I do not attach much importance to the benefit to India from low silver ; all that I am admitting is that India did get a benefit during each fall of the exchange before the gold prices had time to respond. 10.477. Do you think that the import trade into India has been affected by the altered value of silver ? — I think not, it has increased very much, but that I attribute to the growth of population and the in- creasing wants of the population. And, I believe, that the brunt of the fall, the prices of imports into India having been stationary, or if anything tending downwards, must have been borne by the Lancashire manufactures. 10.478. The silver price of Lancashire goods is certainly not higher than it was ? — No, if anything it is lower. 10.479. And I suppose the development of rail- ways in India and turning fresh districts into wheat- exporting countries would be Hkely to produce a purchase of English goods in parts of India where they had not been purchased hitherto, or not tf so ereat an extent ? — Well, to a considerable extent, I should say. 10.480. Next, what have you to say with regard to the decrease in the importation of silver in to India as compared with the importation of merchandise ? — I think it is attributable to the growing feelings of apprehension as to the insecurity of the future of silver, and the natives seem to imagine that the posi- tion of' silver is so weak that it will lead to a gradual total abandonment of its use as money in Europe, and they are bringing out their silver hoards and substituting gold instead. My information leads me to think that such is the case, and hence thi; increased import of gold, which is very marked. For live years, beginning 1873-4 to 1878-9, the average yearly im- ports, including gold and silver, into India were 441,000,000 of rupees. Of that the per-centage of merchandise v/as 85 • 2, th e per-centage of silver 1 3 ■ 1 , and the per-centage of gold 1 ' 7. Whereas the last five years, beginning 1879-80 to 1884-5, the average yearly imports, including gold and silver, were 617,000,000 of rupees ; the per-centage of merch.indise 82 '8 against 85 '2 in the first five years; the per- centage of silver 10 '3 against 13 '1, and the per- centage of gold 6 • 9 against 1 • 7. 10.481. Next, as regards the loss which arises on India's remittances to England owing to the falling •value of silver ? — I consider that a source of very great evil ; it causes disturbance in the financial equilibrium, that more and more money has to be applied towards the payment of India's indebtedness to England; it involves the raising of taxation for reasons which for the most part are incomprehensible to the people. For instance, I do not think that any- thing could be more impolitic or tend more to engender serious disaffection lo the British rule in India than to raise the tax on salt or on petroleum, as I see is contemplated. All these taxes fall heaviest on the very poorest. o 54648. 10.482. What do you think would be the probable effect in the future if the position of silver to gold remains as it is; 1 mean with no fixed ratio, and pos- sibly a further fall in value ? — I imagine that it will lead to the greater importation of silver into India; that it will tend to ilppreciat(^ the standard there, and partially to debase the coinage, and it will also lead to the enhancement of the price of the necessaries of life, which will be a great calamity to the people, who for the greater part live from hand to mouth. 10.483. But hitherto the depreciation of silver does not seem to have produced the effect which some people expected, of causing large importations into India, and higher silver prices there ? — No ; it is rather a puzzling phenomenon, but I think it may be attributed in part to the bringing out of the silver hoards, which has enabled them to go on with what they have. 10.484. (Mr. Birch.) Why should it make them bring out the silver hoards ? — Because they have no further faith in silver. They see that where the price of gold was 15 rupees the tola, it is 22 rupees now. 10,486. But then would gold take the place of that silver ? — They are hoarding gold very considerably. 10.486. (Chairman.) You think it has affected their sentiments with regard to the value of the two metals for purposes of hoarding, so far as to lead them to hoard gold instead of silver ? — Certainly. 10.487. (Mr. Cotwtney .) And what do you con- ceive becomes of the silver which is taken out of hoard ? — It is coined and goes into the circulation of the country. 10.488. Would not that tend to increase the silver prices of commodities — Yes. Of course it will have that effect ; it will depreciate the price of the rupee in the long run. 10.489. I thought you gave that as a reason for the singular fact that silver prices have not risen ; that the silver has been brought out of the hoards ? — I think not. Lord Herschell asked me how it was that there was a decrease in the importation of silver as com- pared with merchandise. I said I thought that was the reason. 10.490. (Chairman^ Then do you think the depre- ciation of silver has had an effect in hindering the raising of loans by public bodies ? — Very mucla. I can speak to that from personal experience. My firm had an offer about four or five years ago from the Port Trust of Bombay to raise a loan of a million sterling in rupees. They were willing to offer 4 or 4^ per cent., and to have it issued at 95 ; but nobody would look at it here, and the consequence was they had to go to the Government, and the Government lent them the money, which money, of course, was borrowed on the English market. It all tended lo inei'ease the burden of obligations. 10.491. (Mr. Barbour^ Was the money lent to the Bombay Port Trust borrowed in England. I thought the Government of India raised a special loan in India in silver for that purpose ? — The money was advanced to them by the Bombay Government ; but I imagine at that time there was a sterUng loan in England. 10.492. (Chairman.) I believe you have some observations to make with regard to the disturbance of trade in tea, indigo, and other articles, owing to the shifting mechanism of exchange ? — Yes, I think especially in the tea trade you cannot very well iarrange for advances, You have to arrange with the banks as the tea arrives fi'om Assam and other places. If there is great uncertainty as to the course of exchange it hinders merchants from going in for tea, and indigo, and other trades, as much as they might do if a stable element were in existence. 10.493. You have spoken of the gold prices re- sponding in this country to a lower rate of exchange ; supposing that you were to fix a bimetallic ratio which would have the effect of increasing the value of silver in relation to gold, to, say, 15| to one, do you think it would follow that the Indian producer would be able to get his old silver price for wheat ? — I do I E. Sassoon. 6 Feb. 1888. 66 EOYAL COMMISSION ON GOLD AND SILVER : Mr. not see why not ; gold prices would rise here in E. Sassoon. proportion to the rise in the price o£ silver. 10,494. Yes ; but we have been told that there are 6 Feb. 1888 . various competing wheats in the market, and that one that competes heavily with Indian wheat, for example, is Russian ? — Yes. 10.495. That if there were a higher gold price for Indian wheat it is possible that people, who otherwise would have bought Indian wheat, would buy Russian wheat, and so diminish the amount of the purchase of Indian wheat. You could not necessarily force its price up to the gold price, which would correspond to the higher ratio of silver, by reason of the competi- tion of articles from other countries. V/hat should you say to that ? — India would be able to compete with Russia and America just as it does now if gold prices rose here, because if you assume that a bime- taUic convention is arranged and silver goes up and gold prices here do not respond, naturally the trade of India would be ruined at once ; but I think that is rather an impossible assumption. 10.496. Why is it an impossible assumption ? Sup- posing, for example, you put up the value of silver 25 per cent., why might not Russia, I do not Say undersell to the extent of 25 per cent., but stiU be so far able to undersell that you could not get the same amount of gold price, and must take, therefore, a somewhat lower gold price if India is to compete with Russia ? — But how much do you assume that gold prices would rise under the circumstances ? 10.497. Well, if you put up the ratio from its present ratio to 15^ to 1, gold prices must rise at least 25 per cent., must they not, in order to give the same silver price to the Indian producer ? — Yes. 10.498. Well, does it follow that if you created that new bimetallic ratio, or, some would say, restored the old bimetallic ratio, that the Indian producer could count upon getting 25 per cent, higher gold price, considering the competitors with whom he has to deal ; for example, this year we are told that Russia is a most serious competitor, why might not the com- petition of Russia be more serious to India if she is obliged to sell at 25 per cent, higher in gold in order to get the same silver that she does at present ? — She may not be obliged to sell in that case. There would be the English wheat competing as well as the Russian and the American. It would depend on the position of prices. 10.499. Yes, no doubt, but that is what strikes me as rather an important question as regards India. It is much more easy to bring about a responding of the gold price to the silver price when it is in the direc- tion of a fall, when everybody is trying to sell ; it may not be so easy to bring about an immediate responding of the gold price to the silver price, when that is in the direction of a rise ? — That is very likely. In that case I should presume gold prices would rise proportionately and Indian prices would fall, in order to make up for the variation in the exchange. 10.500. So that there would be some fall in the silver price ? — There would be. 10.501. But would not that be a very serious thing as regards India, because her taxation would remain the same. If she has to take a lower silver price for her goods than she gets at present, would not that be likely to afEect the people of India prejudicially ?— They pay leas for their imports in that case ; and then there are other considerations to be taken into account besides the wheat and other agricultural industries. 10.502. {Sir T. Farrer.) Why do you assume that the gold prices would rise, and why do you reject the alternative that silver prices might fall if you raised the value of silver ? — I think tliey are both likely to take place. 10.503. But you began by assuming that the gold prices would rise ; is it not an equally possible alter- native that the silver prices in India might fall ? — Yes ; I think it would greatly depend on the price of labour, and on the prices of the necessaries of life. It would depend upon whether the standard of value would be depreciated by the importation of silver. 10.504. And if the effect of raising the value of silver was to make silver prices fall, then you would not raise gold prices in this country at all ? — No. If you raised the price of silver by 25 per cent., and the price of commodities fell 25 per cent, in India, I do not suppose there would be much rise here, except as regards the competition of other countries, then it would depend entirely upon India to what extent gold prices rose or fell. After all, India only exports 12,000,000 cwts. of wheat. 10.505. {Chairman.) What the effect would be, of course, would depend very much upon the state of the crops in the different countries and the particular seasons, and the amounts from different countries that were coming over. All that occurred to me. What I was anxious to get your view upon was this : that the fixed ratio, which has been suggested by some witnesses, might be a serious thing as regards the Indian producer ? — Not if you take other considera- tions into account, that she would not have to bear the heavy exchange losses on the remittances to England for her indebtedness, that she would pay less for her imports than she does now if exchange goes up, because the exchange going up would enable the Lancashire manufacturer to receive less rupees than he does now. 10.506. {Mr. Montagu.) Would not this be the case, that receiving the same gold price, or a little more than the same gold price, if the rupee were to rise imported goods would appear to fall to the native in India. The Government would have to pay less rupees, and yet Lancashire exporters would receive the same gold price or a little more ? — Yes, that is what I was saying. The two things could go on to- gether, the gold prices could rise somewhat, and yet they would appear to fall to the native, who would have to pay a dearer rupee. 10.507. ( Chairman.) Of course the gold price might go up and yet no more silver be paid ; but then I was dealing with the case that I was assuming, in which the people of India were going to get less rupees for their produce, and, of course, if they got less rupees for their produce, though they might pay the same number of rupees for what they imported, they would be in a worse condition. Is not that so ? — It seems to me that they would actually pay less rupees for their imports. The man who imported goods into India would be enabled to take less rupees in return for Iiis produce, because by exchanging it into gold he would get the same amount of gold as before when prices were stationary and exchange was low. 10.508. That all depends, of course, upon the gold prices at which the JNIanchester manufacturer could or would sell ? — Exactly. 10.509. {Sir T. Farrer.) But supposing the effect of the exchange were to make the silver rise in value, then the effect on the one hand would be that the Indian exporter would get a smaller quantity of rupees for his wheat, but the same quantity of gold ; and, on the other hand, the Indian importer would pay a smaller quantity of rupees for his goods, but the same quantity of gold ? — That is it. 10.510. It would be as broad as it is long ? — It would cut both ways. 10.511. {31r. Birch.) You see the Manchester man would have to pay more for his raw material, for the cotton that he brought from India to begin upon ? — Yes; he would have to buy more still, it would depend on the gold price here. 10.512. As you have pointed out the imports and exports would be regulated by the same exchange, you would ship your cotton which would go to Man- chester and be manufactured. It would cost him so much more and you would have to pay so much more for the manufactured article ? — Yes, so much more in gold. 10.513. Then when it was brought back to you it would cost you more, because you got more for the raw material which you shipped ?— Yes, that is so. MINUTES OF EVIDENCE, 67 10.514. {Chairman^ I believe you have some observations to make with regard to the effect of fresh supplies of gold ? — My idea is that if we have fresh discoveries of gold it would tend to determine powers like Austria and E\issia to convert their paper into gold, and thus drive silver more and more out of its monetary economic functions, and tliat it would be much more difficult to arrest the fall of silver then than it would be under present circum- stances. 10.515. So that you think that it is desirable that steps should be taken to arrest its depreciation now ? — Decidedly. 10.516. And those steps, I gather, from what you have said, are the creation of a bimetallic ratio ? — If the four great powers were to join in it I think the ad- hesion of the others would be a foregone conclusion, England, France, Germany, and the United States. If I may be allowed to mention that America, which is, practically, a bimetallic State, has managed to secure an amount of gold which is larger than that possessed or which ever has been possessed by England ; it has about 130,000,000/. of gold, which is about 12 or 13 per cent, more than the whole stock of Great Britain. She only has about 50 or 60 millions of silver in spite of her Bland coinage ; that is rather an instructive fact, I think. 10.517. I do not quite follow the inference that you draw from that ? — The conclusion is that there is a sort of fear that if England enters into a similar con- vention, a bimetallic convention, she will be flooded with silver, I mention the case of the United States, that is practically bimetallic and is not flooded with silver. 10.518. Yes ; but the United States is not bi- metallic in the sense of minting for anyone who brings silver to mint ; she only mints that metal which she herself buys in limited quantities year by year ? — I do not think, before the bimetallic par was given up, that she minted very much more than five millions a year. 10.519. But do you not think that now, if the United States would mint freely for everybody at the silver ratio of 16 to 1, that she would be likely to part with her gold ? — Certainly, if the other nations' mint regulations are not identical. 10,620.' {Mr. Montagu.) That would be the case only if other countries forced silver upon her, not by natural causes ? — Not by natural causes. 10.521. (^Chairman.') It would be a natural cause, would it not, that people who have silver sent it there to be minted at 16 to 1, because that is the most pro- fitable way of disposing of it; should not you call that a natural cause ? — It would be a speculative cause. In that sense it would be natural, but it would be a sort of exchange operation. 10.522. But it would not be a thing done by opera- tion of law in any way ? — No. 10.523. You consider that it would he possible to create a fixed r'atio between the two metals ? — Per- fectly, assuming the adhesion of these four powers that I have mentioned, and I do not believe that it would be to their interest to infringe its terms in any way. We have commercial conventions, postal and telegraphic conventions, and I think the case of the sugar bounty recently is a remarkable case in point. The British Government tries to arrange matters by international agreement. 10.524. You think that prices have been aflfected by the destruction of the bimetallic par in 1873-4 ? — Very much so, but it is impossible to say to what extent ; it is a very startling coincidence that the com- mencement of the period of depression dates from the abandonment of the bimetallic par in France and the Latin Union countries. 10.525. The depression of prices has not uniformly followed the depression of silver, has it ? — Not uni- formly; but the depreciation in silver has told on most of the articles of commerce. 10.526. {Sir T. Farrer.) When you say " told on," what do you mean exactly by that ? — On account of the competition which the products and manufacturers of gold-using countries have to suffer with those of Mr. silver standard countries. E. Sassoon. 10.527. But I thought you said that in the long run the exchange made very little difference to the ^ Feb. 1888. exports of the silver-using countries ? — It makes very little difference to Indian trade; but in the case of the Lancashire manufactures, I believe they bear the brunt of the fall. Indian prices remaining steady, Lancashire manufacturers have to sell at 25 per cent., or 20 per cent, lower. 10.528. And you think that the exchange affects the Lancashire manufacturer in his exports perma- nently, and affects the Indian exporter of wheat in his exports only temporarily ? — I think so ; until wages decline here. I think the wage fund is the last to feel the effect of any dislocation of value. I imagine that the wages would decline very soon here, and it would place the manufacturer on a better footing. He would not nave such heavy fixed charges to bear, but the adjustment will take years and entail much hardship on the labouring classes. 10.529. {Mr. Barbour.) What do you think will happen in India if the rupee goes on falling? — I think it would be simply a disaster to India ; it would be a national calamity, because her import trade would be certainly paralysed. She would have to endure further losses in the payment of her indebted- ness. 10.530. Would it not add to the difficulties of Government also ? — It would add very materially to the difficulties of the Government. I have drawn up a return in which I assume that the exchange would go down to \s. 2^d., and on the assumption of those who maintain that low silver has been a great boon to India ; I take it that the Indian exports would gain by the fall from Is. 5d. to Is. 2^d, I say that she would gain 15 crores of rupees. Against that she would lose from further depreciation of European prices, say, 10 per cent., she would lose, say, 8| crores. She would also lose on her Indian imports, at that low exchange ^that I am assuming, about 10 crores ; and the loss on Government remittances in that case would be another 3 crores and 33 lakhs, making a balance of loss to India of 6 crores and 83 lakhs. 10.531. Another serious fall of the rupee might force the Government of India to reimpose the import duties ? — Very possibly. They would have to put on a great many other duties, too, besides that. 10.532. And I think the chief article of import into India is piece goods ? — That is so. 10.533. And if, as' has been said, there is a diffi- culty in finding employment for cotton spinners in Lancashire at the present time, that difficulty would be increased if India were forced to put an import duty on foreign goods ? — Exactly ; it would operate very prejudicially on the interests of Lancashire manu- facturers, and consequently on their operations and employes. 10.534. And if things came to the worst, might not the Government of India be forced to change the standard ? — It might have to do that, but it would be at a ruinous loss. 10.535. Do you think the adoption of a gold stan- dard in India would appreciate gold in other coun- tries ? — Most decidedly ; the greater demand on it the higher it would be, the more at would become appre- ciated, and the less the price of commodities against which it is measured. 10.536. And prices already having fallen in this country a further fall due to the appreciation of gold would be a special evil ? — Certainly. 10.537. {Mr. Birch.) You seem to attribute the whole fall in prices since 1873 to this variation in the value of silver. I suppose you are aware that on several previous occasions falls in prices to a greater extent have taken place when there was no question of variation in the standard ? — More or less, but I believe them to have been traced to economical causes, increased production, the improved appliances of agri- culture, the spread of railways, and that sort of thing ; I 2 68 BOYAL COMMISSION ON GOLD AND SILVER; 6 Feb. 18 Mr. but during the last 12 years I do uot know that there E. Sassoon. has been any remarkable development of that kind. 10,538. (Chairman.) How many miles of railway have been opened in the United States within the last 12 years? — I was referring "to the developments of that sort in Great Britain, which were in full swing already. Of course, in the United States they have developed very much, but I believe they go on selling wheat at a loss. I do not suppose they would go on unless there were other causes at work. 10,539. {Mr. Birch.) You see the development of railways in England was not of material importance in the cost of moving produce, but in the Argentine Republic, India, and America the opening out of enormous new districts is a fact which we hardly experienced in the previous fall in prices ? — Exactly, that is why I said, it is difficult to say to what extent the appreciation ot gold has affected the prices here. 10,54-0. Then you seem to have made up your mind in the event of any arrangement being made to what they call rehabilitate silver that gold prices must of necessity rise. For instance, if wheat is 305. now it would have to go to iOs. in order to put India exactly in the same position as she is in to-day if you are to adopt the 15^ to 1 ? — I think the difference would be made up by a partial rise in gold prices and a partial decline in silver prices. 10.541. Yes ; but do you not see that there is tre- mendous competition not only from Russia but from gold-using countries, from Australia, from New Zea- land. All these countries are sending us wheat which comes in and competes with the Indian ? — Yes, they would tend to prevent prices going up too much. 10.542. That would be an inconvenience to India? — It would be in a way, but on the other hand she would get more for her wheat ; I mean to the extent of any rise that takes place. 10.543. {Mr. Chaplin.) Has the wheat industry become a very serious element in the annual wealth tliat is produced in India, and in the general pros- peritj' of the country ? — It is certainly a very impor- tant industry ; there is no question about it. 10.544. And so much so that if the Indian producer had to take a lower silver price for his wheat you think it would affect the interests of the country very seriously ? — No ; because the grower is also a tax- payer, and if his burdens were reduced to any extent the losses would be made up to him in the reduction of taxation. 10.545. It would be more than compensated, I understand, in other ways ? — Certainly, compensated to a very large extent, if not to the whole extent of any loss that he might have to suffer through receiving less prices, for his produce. 10.546. Do I understand as regards the general interests of the country that the effect of his having to take a lower silver price for the wheat which he grows might prove iu the long run to be an advantage rather than otherwise? — It would depend on the decline of prices there. If there is a heavy decline I do not think it would be to the advantage of India, but if it is a partial decline compensated in other ways it would be far frem being a calamity, it would be the reverse. 10.547. {Chairman.) But do you not think that the people of India would be likely to feel, and to think they were much injured by the lower price, even although you might be able to prove to them that there was compensation by t.heir getting other things at a lower price ? — They might do that ; that is the result "in limine" of all changes in economical conditions. 10.548. {Sir T. Far7-er.) And as regards the taxes of the Indian producer, is not a large part of them fixed so that if silver was to rise in value the real pay- ment that he would make would be greater while the real price that he would receive would be smaller ? — I do not know that they are all, Ijut I believe the majority of the leases are for 30 years ; they are con- stantly varying. 10.549. But as regards those fixed payments the effects of a rise of silver would be to make the Indian ryot virtually nay more ? — That is so if he does not receive the compensation. 10.550. He would pay the same, and he would receive less in the form of price ? — Yes. 10.551. {Mr. Chaplin.) Did I understand you to say that you would Hketosee the ratio of 15^ to I adopted, but not at once ? — Not at once. I think a ratio that would most nearly represent the relative value of the two metals now would be much more advisable, so that the transition to a very high price of silver might not be very sudden, and abrupt, and violent. 10.552. Does that mean that you would wish to see a return to the ratio of 15^ to 1 ultimately but by steps ? — Ultimately, that is so ; because I believe France and the Latin Union countries have an enormous coinage valued at that ratio. Of course that would take years, 40 or 50 years. But I would certainly not recommend the 1 5| to 1 ratio being fixed at once. 10.553. It was suggested to us by a witness not very long ago, I think, that the ratio of ] 5^ to 1 might be ad(3pted, but only after a certain given number of years. Have you ever considered that suggestion ? — Yes, that would not be a bad plan provided the num- ber of years is a sufficiently large one to mitigate the effects of the transition. It has been contended that bi-metallism is synonymous with protection, but it seems to me that whereas a duty on foreign corn would only benefit one class of the community at the expense of the rest, a double standard system would by legitimately and reasonably raising prices, conduce to the prosperity of the commonwealth and to the welfare notably ot the wage-earning classes. 10.554. {Mr. Courtney.) You are in favour, whether immediately or after many stages, of raising the ratio of silver to gold ? — Yes. 10.555. That an ounce of silver should go further in purchasing an ounce of gold than it does now ? — That is so. 10.556. And you apprehend that the effect of that would be that an ounce of silver would become more valuable in purchasing commodities, and an ounce of gold become less valuable in the future than it is now ? — Yes, that the appreciation of gold would become neutralised by the appreciation of silver. 10.557. That the establishment of the ratio would draw down the value of the ounce of gold, and draw up the value cf the ounce of silver ? — Yes. 10.558. And it might not be unreasonable to sup- pose that they would meet half way ? — Yes. 10.559. Well, if you drew up in that way the value of an ounce of silver, and if India sells its com- modities for silver, would not India get less silver than before for its commodities ? — It would depend on the gold prices of commodities. It depends where she sells them. 10.560. Well, they are sold in India, the ultimate price paid in India is silver, the ounce of silver goes further than it did before in buying commodities, would not an Indian producer in India, therefore, receive less silver than be did before the charge ? — Yes, he would receive a little less. 10.561. Very well, he would receive less for what he has to sell, and against that you would say that he paid less for what he has to buy, I suppose ? — Yes. Since the ounce of silver has gone up, and he pays in silver, the ounce of silver would purchase more than before, and if he wanted the same commodities he would pay less iu silver. 10.562. Have you considered what the balance would be to India in consequence of the two changes ? — I do not think there would be any difference at all ; that whatever she received less in silver for her own com- modities she would pay about the same amount less for the commodities that she imports. 10.563. Does not the value of the commodities sold greatly exceed that of commodities bought ;>•— It does exceed. MINUTES OF EVIDENCE. 69 10.564. Very well then, would not she apparently on that matter of trade lose more tliau she gained ? — She would pay less for the silver that she imports to make up for the balance of indebtedness to her, I imagine. 10.565. But have you conceived the transaction apart from other circumstances ? Here is India conceived as one merchant, one producer, producing commodities, selling those commodities for silver, and obtaining commodities also in exchange for silver. You know the mass of commodities sold and the mass of commodities bought. Would the gain on the diminished price of the commodities bought compen- sate for the loss and the increase for the commodities sold ? — No, I apprehend she would lose more, inas- much as the commodities which she has to sell are larger than what she has to buy. 10.566. And the difference very ranch exceeds the gold tribute ? — Well, I do not know ; I should have to make up an account ; the difference roughly would be between 85 crores and 52, say 33 crores of rupees. 10.567. Quite so; how much is the gold tribute? — The gold tribute is, as nearly as possible, 19 crores. 10.568. Then the difference is very much in excess of the gold tribute ? — Yes ; but the whole of the loss on the gold tribute would be entirely obviated. 10.569. Well, I am coming to that. Would the gain on the gold tribute in that case more than com- pensate for the loss on this balance of trade ? — It would not altogether compensate it. 10.570. Not altogether, so that on the whole there would be still a balance of loss on the alteration to the Indian producer ? — I should have to go into the calculation, because you sent up the exchange to Is. lOd. She would make on the saving of the ex- change a great deal more proportionately than would be represented by the difference on the loss between the commodities that she has to sell and what she has to buy. 10.571. You thought it not unreasonable that the position of equilibrium would be half way ? — Yes, it would be half way, but exchange going up to Is. lO^d. would be altogether a saving to India on the 20 crores; whereas the difference between the exports and the imports would be halved, I imagine. 10.572. {Sir T. Farrer.) Have you thought at all of what the reason is that gold and silver have diverged during the last 12 or 15 years ? — Yes, I have no hesitation in attributing it to the disuse of it as a monetary factor in Europe, and the increased demand that has taken place on gold. 10.573. The increased demand for gold and a diminished demand for silver, so that it lies between the two ? Yes, I attribute it to the combined action of them both. 10.574. You would say that that was one of the main factors which has affected gold prices ; and you do not agree with those who think that gold prices have fallen in consequence of alteration in the supply and demand of commodities themselves ? — No, not to any extent. I think the depreciation of gold prices have been mainly caused by the appreciation of gold. 10.575. By the appreciation of gold coupled with the depreciation of silver, that is what you mean, is it not ? Yes, the combined action of both. 10 576. {Mr. Fremantle.) You said just now that you thought it probable that you might be able to get a ratio between silver and gold by gradations ? — Yes. 10 577. Would your idea be to proceed by two or three successive changes ? — Well, my idea would be to fix the ratio at present in consonance with the differ- ence between the relative value of the two metals, and fix a term for a certain number of years and leave it to the authorities who have to fix the ratio afterwards to decide as to what would be a reasonable ratio to adopt at the time being. 10 578. That arrangement would involve a certain amount of coinage, would it not ? — Yes. 10 579. Have you ever reflected what the result would be of having two or three different coinages of silver circulating at different ratios to gold? — It would bo a question of re-Coinage. For instance, America Mr. has a large proportion of silver that costs her 20 to 1. ^- Sassoon. She might be induced to coin dollars at that ratio, g pT^ss Germany, I think, might be induced to do the same. ' ,' ' And France has a number of over- valued coins and extent of the over value is represented by the credit of the State ; that is to say, if France forces her popu- lation to use hei- fiye-franc coins, which merely represent an intrinsic value of 3 francs 50 or 60 centimes, the difference represents the credit of flu- State, and I do not see why France should not issue paper money to the extent of the difference that she would incur by restoring her coinage to the full weight and fineness. 10.580. But before a final arrangement was arrived at, it would be necessary, would it not, in most coun- tries at any rate, to coin silver at the different succes- sive ratios which would be adopted ? — Yes, that would be an inconvenience. 10.581. And would this not involve, as you said just now, the re-coinage first of all of the enormous mass of silver dollars which there is in the United States ? — It would to a certain extent. 10.582. First and last it would be necessar}, would it not, to re-coin the whole of that amount ? — Yes. 10,683. And to re-coin all silver eventually which was not at the ratio last adopted, say, 15 J to 1 .' — When you say necessitate the coinage of the whole of it, that would depend on the means and demands of the popu- lation, the bar silver can be kept as a reserve against notes in the coffers of the bank. 10.584. Yes ; but would a coin, as the American coin is, issued at the ratio of 16^ to 1, be able to get in circulation at all, or even be kept as a reserve against notes, when the ratio eventually fixed was 15^ to 1 ? — It would be kept as a reserve according to its intrinsic value, not at its nominal value. If the dollar is intrinsically worth less than what it is represented to be it could be kept as a reserve. 10.585. In that case none of the coin could be circulated as coin ? — Well, it would be inconvenient. 10.586. But would it not be impossible that it should remain in circulation if it was not at the fixed ratio ? — That would depend on the terms of the inter- national convention. 10.587. At any rate, you would admit that there would be great inconvenience in making successive changes of the ratio of value between gold and silver ? —Yes. 10.588. {Mr. Montagu.') You consider it of great importance to the trade of this country that the exchange with India and China should be rendered stable, is that so ? — Certainly. 10.589. If stability were ensured for a term of years, would not our trade with silver-using countries be greatly mcreased ? — There is no question about it. 10.590. Are you aware that statements have been made that India has benefited by the fall in the rupee from 2s. to \s. ad. ? — Yes ; I am aware of it, but I believe it is an erroneous opinion. 10.591. If advantages have resulted from the present price of the rupee being somewhat lower, and dangers are apprehended if a further fall ensued, would not the advantages be rendered permanent and the dangers be prevented by fixing internationally a ratio of 20 to 1, equal to 47«?. for silver and ]s. Qd. for the rupee ? — Yes, for the present, certainly. 10.592. You have already stated that it would be quite possible to fix that ralio, and I understood you to say, that after 40 or 50 years they might alter it again ? — Yes, if the convention was found to work satisfactorily. 10.593. You are aware that fears have been ex- pressed that bimetallism at any ratio might cause a flooding of this country with silver ? — Yes ; I do not see why that should happen at all. 10.594. Would not a seigniorage of 1 or 2 per cent, on silver coinage prevent its being used preferentially for international payments, provided that all mint regulations were identical ? — Yes, TO ROYAL COMMISSION ON GOLD AND SILVER: Mr. E, Sassoon. • Feb. 1888. 10.595. And if bar silver reached this country would it not be bought and stored in the Bank of England and other State banks as a basis for the issue of notes ? — Not in its coined state. 10.596. And it need not necessarily be coined, as Mr. Premantle feared, unless it was absolutely re- quired for circulation ? — Exactly. 10.597. Also it might be possible for existing coins to pass as token currency, even if other coins were issued at the fixed ratio ? — Yes, of course that would depend, as I told Mr. Fremantle, on the stipulation of the convention. Of course, I imagine that it could be done if it were so stipulated. 10.598. And such bar silver, in case of the ex- change turning against this country, could be exported in the same way as gold is now ? — Certainly. 10.599. All the States would be bound to receive it as we should be bound to receive it ? — Certainly. 10.600. And, therefore, there could not arise any flooding of our circulation with silver, because no silver need be coined unless, as I say, it was required for the circulation ? — Exactly. 10.601. And in order to prevent fluctuations by a rise in silver after it had been fixed, you would think it advisable that the United States should agree, and also Germany, to coin their silver, the United States re-coining the Bland dollars, would not entail a loss, and Germany who has, I am told, a reserve estimated at about 20,000,000 of silver, if coined at 20 to 1, would prevent any great rise in silver, unless the ratio was altered ? — Yes, that is so. 10.602. You mentioned that in the case of a fall in the rupee the trade of India with gold-using coun- tries would be aficcted only in a temporary manner, which would rectify itself, and you also stated the same with regard to the trade of India with silver- using countries ; but would that be the case, because we are told that wages in India would not rise, and, therefore, would not the trade of India with China, say, or the Straits be developed by the further fall of sUver ? — No question about it ; certainly during the course of the fall it would develop it very materially. 10.603. You spoke about gold hoarding. Now if there was a convention gold would not further rise in India, and would not fluctuate, do you consider that in that case gold hoarding might diminish or cease altogether in India ? — ^Assuming an international con- vention, 10.604. And that they had confidence in silver ?■— Yes, if confidence in silver were restored they would go back to hoarding silver. 10.605. Do you think, therefore, that an amount of gold might be set free by those means in India ?— Undoubtedly I think that. 10.606. Therefore the apprehensions that have been expressed about gold going out of circulation, being used up for the arts, are without foundation ; would you attach importance to the fear that if a conven- tion were made fixing a ratio between silver' and gold, gold would go out of circulation eventually, and be used up for the arts. Do you say that there would be any danger of that ? — I imagine not. It is rather a difficult question for mo to answer. 10.607. (Mr. Birch.) It was stated just now that the market would not be flooded with silver because the silver would exist and would be represented by paper. Now the paper which represented the silver would just as much flood the market as the silver itself ? — I was only saying, supposing France were induced to recoin her five-franc pieces and put the usual full weight and fineness in them, of course there would be a certain loss to make up. For that loss she might issue paper to the extent of that loss, be- cause practically the people take their five-franc pieces although they know they are intrinsically worth three francs and a half, or 3 francs 65 centimes, because they have confidence in the credit of the country. 10.608. {Mr. Montagu.) Does India not suffer now by being almost the sole outlet for silver, and are the enormous amounts of silver held by India any real value outside of India ? — Yes to the first and No to the second question. 10.609. Supposing India were forced to sell silver, would there be means of disposing of it at anything like the price now existing ? — Certainly not ; it would press the silver down to copper prices, I should think. 10.610. Mr. Courtney laid stress upon the advan- tage to India of receiving more silver for her produce, but if that silver is only of value in India by the imagination of the Indian people it would not repre- sent value outside of India. You could not say that it would increase the wealth of India continuing to pour a metal into India that, as you say, could never be re-sold ? — No ; but I imagine Mr. Courtney was assuming the case of restoring the price of silver. 10.611. If silver were restored by having a fixed ratio, then India would become naturally richer be- cause her silver would be available.^ — Yes, would be convertible. 10.612. At the present time it is not convertible ? —No. 10.613. (Sir T. Farrer.) Does not India pay this gold debt really in goods which are exported from India against the council bills ? — To a certain extent she docs. 10.614. Well, for those goods, if the value of silver was raised, she would receive a lower price, would she not, in silver ? — Yes. 10.615. On the other hand, when the Government come to buy gold they buy more gold with their silver, because the silver will buy a larger quantity of gold ? — Yes. 10.616. Then is it not nearly as broad as it is long ? India loses in the price of its goods what it gains in the purchase of gold ? — 'That is so. 10.617. {Mr. CJiaplin.) I want to ask one question with regard to the ratio of 20 to 1. Is there reason for supposing that foreign nations would be willing to agree to the adoption of that ratio ? — "Well, we have it recorded, I think, as the result of the two conferences in 1881, that all the Powers showed great readiness to accede to the adoption of some such plan. 10.618. (Chairman.) But not that ratio; surely the ratio was very difi"erent ? — Of course. I think America would be willing, but France and the States of the Latin Union would, of course, raise an objec- tion, unless it were held out to them that at the expi- ration of the period over which the agreement would be agreed upon that a further reduction in the ratio would take place. 10.619. (Mr. Chaplin.) More • than one witness has suggested to us that it would be an insuperable difSculty ? — It seems to me that it is a question of con- cession and compromise. They would have to take the whole of the circumstances into consideration, and it would be a case of having something done or nothing at all. I think in that case if it were placed in that light to France and the Latin Union countries that they might be disposed to consider a higher ratio than 15^ to 1. 10.620. The fall in the value of silver, which is represented by the decline of the ratio from 15A to 1 to 20 to 1, is, in your opinion, to a great extent the cause of the appreciation of gold .'' — Yes. 10.621. And that appreciation of gold has lessened the value of many kinds of property and commodities ? — Without question. 10.622. Well, then, if the ratio of 20 to 1 were adopted, would it not make that loss in the value of these commodities irrecoverable ; would it not stereo- type the loss ? — It would stereotype the loss ; but it would be a comparative boon on the present state of things. 10.623. (Mr. Montagu.) Is it not the case that the alteration would be to the advantage of India to the extent of 10 per cent. ? — If the present price is 22, with a possibility of going still further, and the ratio is fixed at 20 to 1 ?— Yes, on the whole it would be an advantage to India. 10.624. And also would it not induce investments of EngUsh capital ? — Oh, very considerably. I have MINUTES OP EVIDENCE. 71 no doubt that millions sterling would be sent out to India to open the country. 10,625. Such a case that which you cited of the port of Bombay could not recur if you had any fixed ratio ? — Not at all. "We have the Indian sterling debt of 3| per cent., which is at a substantial premium, and here we have a 4 J per cent, in rupees that nobody would look at, so that India would be able to borrow at f per cent. less. 10,026. In your reply to Sir T, Farrer you seemed to contradict a previous statement of yours ; you said that with the rise of the rupee silver prices would fall in India to the same extent ? — Not to the same extent certainly. 10,627. I thought you said previously that you thought they would meet about half way ? — Yes ; I said gold prices would rise and Indian prices would be lowered ; that they would meet half way in that manner. Mr. £, Saasoon. 6 Ii'eb. laSS. The witness withdrew. Mr. Dadabhai Naoeoji called and examined. Mr. 10.628. (^Chairman.) You have been engaged in trade between this country and India ? — Yes, from 1855 to 1881. 10.629. Was that principally the cotton trade or general trade between the two countries ? — Both im- port and export of all kinds. 10.630. You have, of course, been observant of the changes which have taken place in the relative value of gold and silver, and of the effect of that upon the trade between the two countries ? — Yes. 10.631. First of all what view do you entertain as to the effect of a fall in the gold value of silver upon prices ? — In England I understand that the price of gold has risen in its value and prices have depressed ; that is the general effect. 10.632. According to your experience, has it been the case that as silver has fallen in relation to gold, the gold price of commodities produced in India and exported to England has fallen in like; propor- tion ? — Yes. 10.633. You have observed that as a matter of fact ? — As a matter of fact, and I have explained the reasons also in my letters. 10.634. The reason being that the producer in India gets the same silver price, and in the compe- tition which exists among producers is willing to sell at the same silver price, and, therefore, the goods can be sold here, and are sold at a lower gold price ? — Yes. 10.635. And that, of course, would not apply to one article of production, but to commodities generally that are exported ? — Commodities generally that are exported, yes. 10.636. Has your trade extended at all to China ? — No, except long ago. 10.637. The result, as far as your experience has gone, has been this, that silver prices in India have been unaflfected by the fall of the exchange ; that gold prices in England of Indian commodities have come down ? — Yes. 10.638. {Mr. Barbour.) Do you think that only the gold prices of Indian commodities have fallen, or the prices of all commodities .'' — Here, at present, I am not so well acquainted with the price of all commodi- ties, but my general impression is that there has been a general depression in the prices of commodities here. 10.639. Indian and others .?— Yes. 10.640. {Chairman^ In India have the silver prices remained much about the same, or have they suffered alteration ? — Now in considering prices in India there are so many elements concerned in it that whenever we think of any particular force we cannot test the result of that force by the actual results. Prices are the resultant of many forces. We will take the ex- change by itself alone ; it does not affect the prices there. 10.641. But is it your experience that silver prices in India have risen or fallen in the same way that prices have fallen in England or have remained more or less stationary ? — More or less stationary as a* matter of fact. 10.642. What do you think has been the effect upon Indian trade and the Indian produce of the fall in the gold value of silver. Do you think it has been advantageous or disadvantageous ? — It has been both advantageous and disadvantageous. As far as ' the mere commercial transactions go between the two g Feb. 1888. countries, there is nothing particular either one way or the other, but for a time, temporarily, till prices adjust themselves here in connexion with gold, India has this advantage, that Indian articles come here at a particular silver price, while the farmer here measures his produce at a gold price, and the adjust- ment of that gold price between the farmer, the land- lord, and the labourer will take some time. Until that adjustment takes place, and the farmer is able to hold his own against the Indian, the silver prices of Indian commodities will so far open up a larger market or send a larger quantity here during that temporary period. That is just the indirect advantage which India would receive temporarily. 10.643. And now the disadvantage ? — Now the dis- advantage is this. India is in a very peculiar condi- tion. In every other country all commercial forces only operate, but in India there are certain political forces which counteract the effect of those commercial influences or forces, and that creates a very greaf dis- advantage to India. First of all it can be tested in this way in its exports. Its exports are supposed to be 83,000,000, but a large portion of them are simply forced exports, exports not for commercial pur- poses for which any material return returns to India, but simply because India is in that political condition which compels it to send a certain quantity of its pro- duce here without any material return. Well, that is an evil from which India suffers altogether, even with- out any change of exchange. But when the fall of exchange comes in this evil is further aggravated by India being obliged to send so much more produce to make up the remittances in gold. 10.644. That is to say, a fall in exchange compels the export of a greater quantity of produce to satisfy gold payments that have to be made, whether interest on debt or other charges in this country ? — I do not complain of the interest on railway loans or produc- tive loans, though there are some very objectionable features in these loans also ; to put that aside, I take only the political remittances that arise from India being subjected to a foreign and very expensive agency in its administration. 10.645. That expense, you say, is aggravated by a fail in the exchange ? — By a fall in the exchange, an d that aggravation is a very large one. 10.646. {Mr. Birch.) You referred to a portion of it being for railways. Can you tell us what is the proportion? — The interest on railways and public works is about six millions. What is caused by this political condition is what I have put down at the end as private remittances, about 10 millions, and the political portion of the home charges. For these exports there is no return whatsoever to India in any material shape. 10.647. {Mr. Barbour.) What are these 10 mil- lions ; can you give the details of them ? — I have only roughly put it down here, because I cannot say how much the Europeans in India remit of their salaries or of their profits that they make in India ; the European agency which is employed there necessarily receive salaries there to the exclusion of the natives of the country, and they remit here from time to time for 72 EOTAL COMMISSION ON GOLD AND SILVER: Mr. D. Naoroji. 6 Feb. 1888. their children and for their familiesj and afterwards when thej return they bring anything that they have saved, and then they receive their pensions here. 10,648. But have you any data at all for the 10 millions — anything to show that the item is 10 millions rather than, say, 2 millions ? — The best test or estimate would be to see what, in its commercial relations, India does not get back at all — as every other country does get back — on account of the payment of the home charges and of the private remittances by foreigners, I take an average of ten years. The total exports from India, including, treasure, and excluding i3-overnment stores and treasure are, for the years 1877 to 1886 in tens of rupees — Rs. X. 768,564,363 Add freight, insurance, and charges, say 10 per cent, (the per-centage on heavy raw goods is generally large) on merchandise — 74,919,788 Rs. X. 749,197,885. 843,484,151 Add 10 per cent, ordinary profit on merchandise, in eluding charges, viz. Rs. X. 749,197,885 + 74,919.788 82,411,767 =824.117,673. Rs. X. 925,895,918 Now, under ordinary economic circumstances, as in all other countries, the total imports intiluding treasure ought to be equal to exports plus profits, i.e. : — Rs. X. 925,895,918 But the actual imports into India including treasure and excluding Government stores and treasure are — Rs. X. 579,472,765 which, being deducted, — leaves — Rs. X. 346,423,153 which amount never re- turned to India, and is absorbed by the home charges and private remittances. Taking the home drawings of the India Office during the same ten years to be Rs. X. 173,198,962, and deducting it from Rs. X. 346,423,153, there remains Rs. X. 173,224,191 to account for private remittances to foreign parts, giving an average of Rs. X. 17,322,419. I have, to be on the safe side, and to make any necessary allow- ances, assumed only Rs. X. 10,000,000. In 1876, Mr. .1. M. Maclean, then the editor of the " Bombay Gazette," and now senior Member of Parliament for Oldham, said in his paper : — " It has been estimated " that the amount of the annual earnings of English- '• men connected with India which are thus trans- " raitted home cannot be less than 20,000,000/., and " we should be inclined to place it at a very much " higher figure." This may include pensions and salaries paid in England and included in the home charges, i.e., in the drawings of the India Office. 10,648a. I do not know on what data Mr. Maclean based his figure of 20,000,000/., but the calculation which you have given seems open to objection. In the first place you add to the recorded value of Indian exports 10 per cent, on account of freight, insurance, and charges. As the insurance is effected with foreign companies, and as the exports are carried almost entirely in foreign vessels, it does not seem correct to credit the insurance and freight to India. If the exports were carried in Indian-owned vessels and the insurance effected with purely Indian com- panies, the case would be diflerent. There would then be a valid reason why the freight and insurance, or some equivalent for them, should be imported into India. Similar remarks apply to the other item of 10 per cent, for profit and charges, at any rate to a large extent. In the next place you exclude Govern- ment stores from the imports. This is a large item, ranging in value from Rs. X. 2,000,000 to Rs, X. 4,000,000 yearly, and as it represents railway plant and rolling .stock for the Government railways, telegraph materials, arms and ammunition for the army and other stores for various military and civil de- partments, there is no reason why it should not be treated as an item of import of which India reaps the benefit. The export item of Government stores and treasure which you exclude on the other side is com- paratively small, and a portion of it is rightly ex- cluded, because it represents stores and treasure sent for the use of the Indian troops and establishments at Aden and at places in the Persian Gulf, and it only appears as an Indian export owing to these places being situated outside the Indian Customs line and to Aden being a free port. Are not these matters which require careful consideration in making a calculation such as that which you have put forward ?— I am not able to give the data of Mr. Maclean's figures. Freight, insurance, charges, and profits ought to be added to the customs values of exports from British India. From the very commencement of ploughing — for ploughing, seed, reaping, cart or railway carriage — to the port of shipment, carriage across the seas, all charges on both sides, commission, insurance, and profits, i.e., for all labour and materials for all these purposes payment has to be made from the exported produce itself. Every one of these items takes its share out of that produce. Putting it in another way, every item is paid out of the value or proceeds of the produce. If the produce does not realise sufficient proceeds to pay for all the above items, the exporter has to pay the deficit from his own pocket, besides getting no profit. Next. The customs values of exports from British India do not include freight, insurance, and other charges, while, on the other hand, the customs values of imports do include freight, in- surance, &c. To make, therefore, a right comparison between imports on the one hand as a return for ex- ports plus profits on exports, on the other hand freight and insurance must be taken on both sides, and profits must be added to exports. My comparison of the imports, as I have made in my previous reply, requires even some further deduction. I have there treated imports as being simply equal to exports plus profits on exports, or, in other words, the laying down cost at the port of importation. But actu- ally the customs value of imports includes something more. Customs Act VI. of 1863, sects. 26 and 180, and Customs Act VIII. of 1878, sect. 29, as well as the information I obtained in 1876 from the Bombay Custom House, show that the imports are valued iit their selling value within India, and for that pur- pose, and to include the profits on the imports tiiem- selves, also 10 per cent, are added to the invoice values of imports, or 20 per cent, on manufacturer's invoice. To make, therefore, a correct estimate of imports as a return for exports plus profits on exports, and a correct estimate of the amount absorbed in home charges and private remittances, the above 10 per cent, ought to be deducted from the customs values of imports. There is a still further deduction necessary to be made from the imports. These imports include rail- way plant and rolling stock to the extent, on the average of 10 years (1877-1886), of Rs. X. 1,223,646 per annum. Now this amount in the im- ports is not received by British India in return for its own exports with profits, but is paid out of the capital or property of the railway companies, and should therefore be deducted from the declared im- ports to get at the new trade imports. If these deductions be made, as they ought to be, it would be_ found that I have very largely under-estimated private remittances. If India, like other self-govern- ing countries, could get back her full returns for her exports, and had not to suffer from her peculiarlv unnatural economic position arising from the presen"t, system of Government, then, in order to ascertain the result or profits of iho whole trade, if freight and insurance were not taken into account on both sides, it would not matter very much; but to have the MINUTES OF EVIDKNCJE. 73 estimulo us accuriilo as possihli;, it is very necessary that every incident or item in the whole process of the trade t-liould be taken into account. For accord- ing to the character of the produce — v.-liether raw or manufactured, whether packed in tin or without tin, or not paclied at all — the incidence of freight, insu- rance, &c. will be very different. For instance, on coal, which may be, say, 8s. or lOs. per ton at the mines, freight is often 300 or 400 per cent, of its cost value ; while for manufactured goods freight may be only 5 or 10 per cent. ; and so also rates of insurance are dittereut, with particular average or total loss only. Another injury to the export trade of India, owing to its unnatural economic conditions, must be always borne in mind. I give ii. in Mr. Mill's words in his Political Economy, ISook III., Cap. 21, Sect. 4 : — " The result is that a country which makes regular " payments to foreign countries, besides losing what " it pays, also loses something more, by the less " advantageous terms on which it is forced to ex- " change its productions for foreign commodities." . . . " The result to the interest of the two coun- " tries will be as already pointed out. The paying " country will give a higher price for all that it buys " from the receiving country, while the latter, besides " receiving the tribute, obtains the exportable pro- " duce of the tributarj' coutitry at a lower price." Thus the exports of India, being forced and not naturally commercial, are forced to be sold for what- ever they can fetch, and therefore obtain a lower price. With regard to my excluding Government stores from imports, they are already included in the drawings of the home charges from which they are paid. And, moreover, tiiey do not form any return for the trade exports. They are simply payments from revenue or loans. They are entirely outside of commercial transactions. So also the exports of Grovernment stores are paid for from revenue, and are simply just the same as expenditure for similar stores within British India, as you rightly ."ay. 10,6486. I should like to keep as closely as possible to the original calculation, and I will try and make my difficulty clearer by taking up only one item to save time. The Indian producer sells his produce in Bombay, we will say, at the highest price he can get. The connexion of the Indian producer with the pro- duce is then, as it seems to me, at an end, and so far he has no ground for complaint. The produce is next carried to England in an English ship and sold to the English consumer, an addition to the Bombay price sufficient to cover freight and other charges being included in the price charged to the English consumer. As the freight on the produce was earned by an English ship after the connexion of the Indian producer with it had ceased, and as the freight was included in the price charged to the English consumer and was paid by him, do you really think that India has any ground for claiming this item in the making up of the account between the; two countries ? ] may explain that my objection is not to the inclusion of freight as one of the items in wliat is called the inter- national equation, but to the assumption that all the items on one side of that equation must, in equity, be credited to the same country ? — Allowing the exclu- sion of freights, the estimate will stand as follows in accordance with my previous reply : — The total exports from India, including treasure and excluding Government stores and treasure, are, for the 10 years 1877 to 1886 in tens of rupees : — Es. X. 768,564,363 Add 10 per cent, ordinary profits on merchandise of Us. X. 749,197,885 - - - 74,919,788 Ks. X. 843,484,151 Now, under ordinary economic circumstances, as in all other countries, the total imports into India, includ- ing treasure, ought to be equal to Rs. X. 843,484,151. But the actual imports into India, in return for these exports, are as folio r/.' ; - o 54G48, The custom ^'idiic of iniimrls, ii.- chuling trcasiire and cxx-luding Government stores, ii Deduct railway plant and rolling stock, which are not a return for exports - - - Rs. X. 579,472,765 12,236,467 3Ir. I). Naoroji. 6 Feb. 1887. Rs, X. 667,236,298 Deduct 10 jier cent, which are added to the invoice value of merchandise in making up customs value — Merchandise Rs. X. 455,970,281 Less I'ailway stores - 12,236,467 Leaves - Rs. X. 443,733,814 10 per cent, included therein, say about . - - 44,000,000 Rs. X. 523,236,298 This, then, is the correct value of commercial im- ports which India receives back, instead of what India, under ordinary circumstance, ought to receive back, viz. : — Rs. X. 843,484,151 Dedujt what India actually gets back - - - - 523,236,298 Rs. X. 320,247,853 This amount does not return to India, and is absorbed in the home charges and private foreig/j re- mittances. Taking the home drawings of the India Office during the same 10 yeais to be Rs. X. 173,l!)8,962,anddeducting it from Rs. X. 320,24 7,853, there remain Rs. X. 147,048,891 to account for private remittances to foreign parts, giving an aver- age of about Rs. X. 14,000,000 per annum. I have, to be on the safe side, and to make allowances for any omissions, assumed only Rs. X. 10,000,000. 10.649. {Sir T. Farrer.) You attribute that loss that you have been speaking of to the fall of exchange ? — Nc. 10.650. But I mean- to say that the increased pay- ments that have to be made on accouAt of these items you attribute to the fall in exchange? — The increase in addition to this by the fall of exchange induces so much more the necessity of sending so much more produce. 10.651. And you attribute that fall of exchange to the appreciation of gold ?--Yes. 10.652. Then, so far as that increase is concerned, in what respect does the increase of the burden of India differ from (he increase of the burden of a gold country. Supposing that a gold country, such as Australia or Canada, has a debt to this country its burden is increased also, is it not ? — Yes ; but the debt is of a different kind. If it is a commercial debt we do not regard it also as a burden such as all this 6,000,000 paid here for railway. It is a matter of business. We must take our chance and pay the interest ; but it is this political condition which neither Canaer questions). — The question "to what do you " attribute" a phenomenon opens a wide field. It brings into view the entire range of elements which have combined their influence to produce the pheno- menon ; and the temptation arises in answering the question either to contemplate with indifl'erence both causes and conditions, or fail to recognise the restraints upon freedom of choice among them. In a certain sense each of these regions is a little world in itself, for there is an endless multiplicity of factors distri- buted in time and space, without the concurrent existence of which the monetary situation could not have been exactly what it is. For the purpose of gain- ing any useful generalisation as to that situation, the range of view must be limited to the causes and con- ditions that are close at hand, and they M.ust be dis- tinguished, the controllable forces must be recognised as such, the subject looked at in mass and in per- spective. These observations, however obvious and common- place, would be germane if it were for a purpose purely scientific that tihe labours of the Royal Commission were undertaken ; if it were merely an Economic Academy gradually accumulating the materials for an exhaustive Dictionary or Cyclopaedia of Monetary Science. This, however, is not understood to be its character. However important the contribution which it makes to the knowledge of monetary economy, its function is primarily a practical one, that of a special council of State, its function as a scientific body being tributary to its function as a political body. Its members, deliberating upon the remedies of existing evils and the means of preventing future evils, are to act by recommendations, positive or negative, express- ing themselves favourably or unfavourably, upon a proposal to modify English monetary laws, and are. at the same time, to exert an influence, favourable or unfavourable, upon the prospect of the adoption of modifications of their laws by the legislatures of other nations, an influence which cannot fail seriously to affect British interests. The point of view of the Royal Commission is, then, really that of the learned lawgiver at the moment of decision, or of drafting a decree. Although it deals with a subject presenting many problems unsolved or insoluble, its object is to act ; as a council of astronomers would reform a calendar, or select a meridian, without determining the chemistry of the sun, or completing a catalogue of the stars. In so far as the Royal Commission shall affect legislation, whether positively or negatively, passively, or actively, by leaving things as they are, or by suggesting change, it directs the will of nations for good or for ill. Its choice between the two paths which lie before it must mark a turning point in history. The path.s are well distinguished, for a decade of controversy has been exploring these flelds of thought, and all mankind have an interest in the decision. Further light is to be thrown upon the questions : Has the general outlawry of silver money, pending since 1873, been beneficial to England? — Will the restoration of silver to permanent raonetary equality with gold by joint action of nations be bene- ficial to England ? — questions upon which England gave some answer before the nations in the Inter- national Monetary Conferences of 1878 and of 1881. Impetus will be given to decision of the questions : Shall England promote monetary union or monetary disunion? — Shall England aid in giving stability or instability to the foundation of the valuations of man- kind? To deal with these issues is the gist of the mandate of the Eoyal Commission. The course of definition, then, which I am now seeking to present — that which, with a view to action, would insure a grasp of the situation as a whole — is the course which the Commission takes in order to fulH' its trust, to " rise to the height of its great argument." Hence, one who seeks to give answer to the questions of the Commission will do well to regard the same perspective in his replies, as far as his vision may reach. But to do this, and to guarantee thorough understanding of these replies on th.e part of a reader, they must be seen and be shown in their relations ; it is necessary not only to declare the standpoint, but to define it with particularity. To this end, a certain energy of precision is required to overcome an existing tendency toward confusion, an opaqueness of the very atmosphere by which all readers of the day are stu-- rounded. There is an omnipresent never-resting pressure, a momentum of opinion, a gravitation of interest, which resists an adequate recognition of the obvious truths heretofore set forth, and which there- fore calls for a corresponding energy in their vindi- cation. I do not here refer merely to the well-known obscurity and difficulty of the subject, by reason of which the questions of the Royal Commission, though brief in themselves, would need a volume for ex- haustively explicit treatment, but to a peculiar tendency towa,rd error the nature and origin of which is given by the following facts. These anti-silver laws, whose effects the Royal Com- mission is called upon to study, were not adopted with- out deliberation. The advice of counsel was taken, men of action submitted to men of thought, and the advising counsel were the learned of ^ generation. It was the general consensus of the learned opinion of the time which these laws were intended to reflect. The republic of monetary learning, an vmperiwm in i/m/periis, an economic church which respects no national boundaries, was unanimou s. It believed in the uniflcation of money, in security of valuations, in simplification of the means of exchange, in facilitating international trade and investment, an aim nobly in unison with the progressive spirit of an age whose glory it is already to have made giant strides in this direction, by putting nature's forces m harness, as well as _ by cultivating the faculties of men. This was the aim, the object, the end. What could be more worthy ? But of the means to attain this end what account is to be given ? What was this means ? The outlawry of silver, the legislative or administrative exclusion of silver from legal privileges hitherto enjoyed equally with gold. Did this tend toward the unification of money and the beneflts it was to bring in its train ? This is one phase of the subject before the Royal Commission. In considering it, there are at least two hypotheses that must be entertained, namely, either that this repeal of laws equalising the metals was wise, or it was unwise. 'J'he inquiry can hardly be carried on without entertaining these two suppositions. If the latter supposition, which I aver to be true, be dispas- sionately examined with some deliberation, it will appear that it entails precisely the conclusions as to the present confused state of monetary learning to which I have referred. We assume then that, in the field of action, lay error : the means was not only inadequate for its special end, sacrificmg substance to shadows, but was disastrous in the wider field of its influence. Failing, however, to perceive all this in advance, the learned world was betrayed into acting as sponsor of a mistaken scheme of unification, accessory before the fact, aider and abettor in the great overt acts of the anti-silver movement, the anti-silver laws of Germany, which were followed in natural sequence by the anti- silver laws of other states. The event is unique with- out precedent. For the first time in history has a theory of the closet been so abruptly transformed into jm gentnm,, the law common to the nations. How far, then, did the interpreters of science feel themselves committed to justify the correctness of their practical suggestions P How far did they recognise the means which they had suggested to. attain an end, as merely tentative, as an experiment, as the object o: 80 ROYAL COMMISSION ON GOLD AND SILVER : App. I. scientific curiosity rather than of partisan attachment ? Did they feel themselven committed to the error as well to the trutli, to the mistaken means, as well as to the justified end? The question is of decisive practical importance. Certainly the average man would naturally regard them as so committed, and human nature being in full operation, it is quite plain that it required a certain rare elevation of spirit, for one who had borne a part in the anti-silver movement, to grant access to his mind for that course of study of the practical working of the change wrought by anti-silver laws, which showed he had been in the wrong. Beside this the mere momen- tum of accomplished facts, the complexity and obscurity of the subject, made such study an effort which could not fiiil to be unwelcome and would easily seem to be unnecessary. To whatever extent, then, economists failed to support this new burden of learning and of un- learning, an unique array of forces was summoned to defend error. Conviction must take time, and until it becomes general, fallacious doctrine must here and there be flourishing under the shadow of authority, an abnormal atraosphere of monetary opinion must obscure, refract, or distort the image of truth. It is then quite in the natural order of events that mighty forces should be at work to prevent recognition of the truth as to the questions before the Commission, a resistance for which the vitality of a race, or of a religion, alone affords adequate parallel. To prove this steadiness of pressure, the very existence of the Eoyal Commission is itself a witness. It was commissioned in 1886 to perform a task, a goodly part of which a Special Committee of the House of Commons, appointed in 1876, might, could, and it may be argued should have performed. Ten years of the life of a gene- ration, a goodly fraction of the most active years of the 1 9th century, are thus, in a certain sense, a naeasure of this force. For whatever obstacles to conviction and bent toward fallacy there may be, the special subject now considered supplies outwork and bulwarks, and fortress, and tlie very inner and final citadel of strength. One may say indeed the very configuration of the ground combines the natural advances for defence. It is upon final analysis, the free will of men which afibrds the staple of discussion, but the free will of men moving as it were in two distinct masses, the one belonging to the individual acting separately, tihe other to the organised will of the community, the State acting through governments. The difficulties of adequate distinction between the two orders of volition, of assign- ing its true place to each, offer amplest field for a con- fusion which must surely tend to obscure the duty of statesmanship, whose task consists in overcominginertia, in stimulus, and direction and control of the will of nations. The mere enthusiasm of the votai'y of science, making " better the enemy of good," as the French phrase has it, may thus tend to defeat the true object of inquiry. It is with a view to these various considerations that the present response to the invitation of the Commission is conceived ; and in order, as far as may be, to guard against misapprehensions which may naturally arise, I have presented laconic loplies, surrounded, as it were, with signals of definition and explanation. Answee. — I attribute the fall in the value of silver, as compared with gold, to anti-silver laws and govern- mental regulations in the western nations. Explanation. — Throughout the entire pendency of the breach of parity between silver and gold, the opinion has been currently expressed that this fall is attributable to certain other alleged causes, which are herein-after set forth. (A.) A preference for gold or antipathy to silver. The error of this view consists (1) in an erroneous interpretation of the word "cause," or (2) in a mis- apprehension touching the practical operations of busi- ness, the use of money. (1.) The word "cause" is used to designate the motives which led the individual rulers of Germany to establish gold and reject silver money, and of France to check the rate of silver mintage, &c., and it is as- sumed that preference for gold and antipathy to silver are an adequate characterisation of these motives. Without stopping to inquire whether this characterisa- tion is correct it is sufficient to point out that it is irrelevant. What we are concerned with is a deed, an act, not an opinion or intention, just as in a surgeon's diagnosis of a gunshot wound it is indifferent whether the shot was fired intentionally or by accident. (u.)_ A field of importance is, in imagination, opened to this " preference for gold," by fiatly ignoring the most obvious facts about the uses of money and the nature of the institution of money. The exertions of the visionary in the defence of anti-silver laws have offered a parallel to the speculations of the mediseval schoolmen. There is no lack of opinions on money, which are exp)icable only on the ground that their authors are ignorant of the existence of laws of legal tender, coinage, banking, &c., or imagine that if there are such things they are of no effect, that the citizen pays no attention to them, acting exactly as he would act if there were no such laws. As is usual in case of delusion, the sense of humor here shines by its absence, for these products of a sophisticated imagination exist for the special purpose of defending nothing less than actual laws of legal tender and coinage, — anti-silver laws, gold-favouring laws,— to which their advocates ascribe great efficacy. {B.)_The slightly increased production of silver from the mines has been regarded as a cause. (C.) Certain special inscanoes of a reduction of the employment for silver, which are familiar to the Com- mission, have been treated as a cause. The error of B. and C. lies in treating as paramount and efficient a factor whose influence is only ancillary and subordinate. While the slightly increased output of silver and the India Council Bills, &c. exerted a depressing infiuence on the market ratio of silver to gold, yet they did so only because of the anti-silver laws. But for these laws they would have had no effect. Their effect is thus a part of the effect produced by the anti-silver laws, and they are not entitled to be regarded as a cause of the fall, in the proper sense of the words. It is from ignoring this point that the errors B. and C. arise. I am not aware that the facts have been dis- puted. To dispute them it would be necessary to maintain that if the minis of Germany, Holland, France, Belgium, &c., and of the Huited States, had remained open to free coinage of silver, gold would still have risen above the French par in silver, by reason of Nevada's silver product and India's payments in London, an opinion which is obviously erroneous. 11. What probability is there Answpt? Thp ohiot cla of a continuance of the fall V -a-wowtn. — J.ne cniet ele- ment m the calculation of this probability is necessarily the action of govern- ments, and the action.of governments will presumably be affected to an important extent by the action of the Soyal Commission. To discuss the probable action of the United States, of Germany, of France, or of other powers, without reference to the alternative possibilities of a decision on the part of the British Indian Empire, a decision which, in its preliminary form of a report of the Eoyal Commission, it regarded as impending, would be futile. In estimating the importance of this decision from the international point of view, essential data are embodied in the conclusions of the two international monetary conferences called to discuss the proposal of a con- current regulation of the legal position of the monev metals. ■' In the Conference of 1878, called by the United States, m which Germany was not represented, the delegates of the other principal powers united in a declaration recognising " that it is necessary to maintain in the " world the monetary function of silver as well as of " gold." In the Conference of 1881, called by France and the United States, the attitude of representatives of the British Indian Empire and of the German Em- pire, the chief Powers whose adhesion to a programme of concurrent action was withheld, nevertheless respec- tively recognised an interest in the carrying out of that programme, offering certain measures to be adopted withm their respective jurisdictions as a contribution to its success. To whatever extent, then, this action of the two Powers can be held to have any binding effect, the question of principle, touching the main issue within the considera- tion of the Eoyal Commission was admitted, and the issue was narrowed to the question of amount, how much these Powers were respectively prepared to' do in order to bring about a settlement of the existing conflict of coinage systems. The quota of co-operation actually offered not having been looked upon by other nations as sufficient, a long period of monetary inaction, so far as modifications of monetary laws are concerned, has followed, which seems to imply an expectant attitude, looking especially to a new departure on the part of Great Britain. APPENDIX. „ II^-,T? ^"'J*' '^''Z -V" ijtiniJ.'itu DErraiTioK.-— See Question tho tall HI the wholL'sule jn'ieos -r ^ odiiany ('oraraodities wliii'h has -*-■ been in nrogress ilurinK the last Ansavek, — I attribute the 10 or 12 years? general fall of prices to the anti-silver laws and regulations adopted and carried out in various States since 1871 ; but this assertion cannot properly be held to imply necessarily that if thcr(j had been no anti-silver laws there would have been no fall of prices, nor that there would have been a rise of prices. No probabilities of this kind can be laid down with pre- cision of detail. From the point of view of the legis- lator, — ^responsible for tho action of the State, and treating the action of individuals in all the minuticB of processes of production and distribution as merely giving the conditions amid which he is to act, — it is sufficient to say with certainty that if there had been no anti-silver laws the fall oi' prices might not have occurred, and that the greater part of that fall could not have occurred. Whatever doubt may be justified in the matter, the opposition to the outlawry of silver is entitled to the benefit of the doubt ; the legal pre- sumptions are against the outlawry of silver. They are likewise in favour of its being set aside now. Explanation. — Among the current explanations of the general fall of prices (or appreciation of gold, which is only another mode of describing the same event), prominence is oft'^n given to certain notable features of modern economic life, namely, now inventions, im- proved means of transit, transport, and communication, new methods of business all tending to lessen the labour of production. It is therefore important to ascer- tain what place is to be given to these elements of the situation. Beferring to the considerations presente^l in tho definition of Question I., I first observe that these elements, from the standpoint of monetary policy, occupy at best an inferior and subordinate place, as afi'ording merely the conditions with reference to which the legislator has to act. If the tendency of their influence upon prices is downward, and thus to produce an injurious rise in the purchasing power of money, the business of the legislator is, if possible, to counter- act this tendency ; and if, as has been stated, the main- tenance of silver in parity with gold would have this result in any important degree, then the practical ques- tion is decided in favour of silver. The same response applies to the reasoning, that sometimes attains currency, about over-production, which should rather be named under-consumption. But the anti-silver argument, ba^ed upon new inven- tions and improved methods, is not content with eleva- ting conditions into causes. It goes further. It main- tains that because new inventions and improved methods are economic benefits, therefore the fall of prices is an economic benefit. Here lies the real strength, because here lies the seductiveness of the argument. In essence this reasoning is merely a reso- lute begging of the question, and puts the cart before the horse. This will be apparent from the following analysis. If a general fall of prices or rise in the value of money is an evil at all, it is an evil because it is a • derangement of the terms of existing investments and obligations, and a derangement peculiarly unfortunate ; being more injurious in proportion than its complement a fall in the value of money, because it disturbs the adjustment of the machinery of business and so checks the normal growth of enterprise. Evidently no pecu- liarity of origin of the rise in the value of money can divest it of this latter character ; it must be a derange- ment, no matter how it comes to pass. To deny, then, that such a dislocation of values is an evil at all is an obvious error. It implies, in fact, the impossible opinions that.it is not desirable that money should remain stable in value, and that "hard times " are not an evil. From this it is but a short step to affirm that it is the busi- ness of statesmanship to prevent prosperity. We proceed to consider the argument which defends this evil, a rise in th? vulue of money, as a. price, so to speak, paid in order to secure the admitted economic benefits of new inventions and improved methods, and therefore more than made good by the profits of the operation. The illusions embodied in this view will, I think, be disclosed by the following analysis.^ What is the diflTerence of effect between an invention that does not lower prices at all — to imagine an extreme case — and an invention which lowers them ? Does it not consist in this, that in the latter case it is (what economic science knows as) "tho consumer" who has the gain o 5464s, which in the former o;ise would go to " the producer "? Can there be any doubt that the admitted benefits of new inventions and of improved methods can be obtained without paying such a price, so ruinous a price, as a general rise in the value of money ? There should be no doubt. It is not necessary, it never was (strictly) necessary, to pay this price. (See C, page 4.) That this truth is left out of sight is probably due to an exaggeration of the importance of the new inven- tions and improved methods which have come into play since 1873. Offering, as they do, tho strongest, because most seductive, argument to defend the anti-silver laws from the charge of having produced a ruinous dislocation of values, so much has been said about these new inventions and methods since 1873 that men forget what happened before 1873 ; and, forgetting what happened before 1873, they ignore what might have happened since 1873 but for these same anti-silver laws. Before 1873 a marvellous development of "cheapen- ing " inventions and methods took place, while there was no fall of prices, and also during periods when there was a rise of prices. Why could not the same experience be repeated P Evidently it would have been repeated after 1873 if the conditions of quantity (parity, see page — ) had been maintained by a proper course of monetary legislation. The entire plea of new inven- tions and new methods is thus put out of court. It remains to consider some special points which have been relied upon to e.Kcite sympathy for this plea. Special reasons are alleged why a fall of prices is a benefit ; namely, that it tends to improve the relative position of the manual labour classes. If this entry to its credit were correct (in certain cases), it would be more important than it is, to note that the debit entries are also to be taken into consideration, that the annual i-eturn for manual labour is not to be ascertained by multiplying an average of daily wages by 300, but is a question of fact to be proved by testimony, in which the number of "unemployed," the regularity and ceitainty of work for the employed, would come under examination. But the credit entry is nob correct. This entry is not to be made correct by the mere observation that the productiveness of work, in obtaining satisfaction of his needs for tlie worker, has actually increased of late years. To rely upon this observation is to reveal con- fidence in a false issue. The true issue is : Would the satisfaction of the worker have ieen less if there had been no anti-silver laws ? I am not advised that any apologist of anti-silver laws has established the affirma- tive of this issue. ly Has it extended to (a) AnsWBB.— On these sub- retail prices, (01 wap:es and • i t i ^ -j n other payments for services jects 1 have no fruits of rendered, (c) land ai]d houses? original research to present, and can therefore add nothing to the evidence already before the Commission, unless by way of analysis and criticism of that evidence. In a general way an affirmative reply to Question IV. is indicated in the answers to other questions, and some brief criticism is also set forth touching certain in- ferences which have been drawn from the facts toward which Question IV. is directed. An-. I. Di:finition. See Question V. Hiis the tall resulted in any material prcjudict^ to tiie coinmcrcial or general interests -*-• of the world? Answeii.— Yes, So far as a vitiated system of money can affect them. Of course the respective degrees to which various national systems of money have been so affected cannot be stated with precision. Explanation. See also Question III.— The general importance of stability of average purchasing power and of parity between monetary systems connected by trade or investment are elementary, rudimentary, principles of monetary policy ; very much as the rule of the majority is an elementary principle of represen- tative bodies. These principles belong in fact to the category of definitions. It is impossible to define good money with- out including the "parities " which have been violated m these dislocations of values, and it is impossible to define what is desirable so as to exclude what is good. Granted the existence of men, it is desirable that there should be good men, and so, likewise, granted that money exists, it is desirable that it should be good money. Kow to say that the money of Europe has been and ia good money, as good money as it would have boon if L 82 EOYAL COMMISSION ON GOLD AND SILVER: App. I. thero had been no broach, of the parities, is intrinsically '_ a.bsnrd, and nothing but the confusion produced by the causes analysed in the definition of Question I. prevents universal recognition of this absurdity. If the absence of a certain par between London and Bombay is not a material prejudice, the absence of a certain par between London and Manchester is not a material prejudice ; if a past fall of prices of 25 per cent, is not a material prejudice, a future fall of 25 per cent, will not be a material prejudice, or 50 per cent., or 75, 80, 90, a fall which would reduce the business world to universal bankruptcy or repudiating. So long as human naturn endures, men who buy and sell will bo glad to know what the price is to be, men who invest will desire a return, mortgagees will desire that their security shall be enough to pay the debt, and mortgagors will desire to realise as much as possible from their " equity of redemption." It is upon the propriety and persistence of such desires as these in men, or iu other words upon the inexpugnable basis of human nature, that the affirma- tive answer to Question V. is based. Definition. — The question qcuntries usiug..the gold stan- j^ ^ ^^^^j^ question. The VI. Do you consider that the jcimtries using tlie gold stan- dard, or any of them, are suffer- ing from an injurious contrac- first part relates to a matter tion of the currency which ^f f^ct : "Are certain coun- might have been obviated or ,, , . . ^ mitigated by an increase in the tries, is any country, supply of gold? " suffering from contraction " of the currency ? " The countries referred to as " using the gold stan- dard" use this standard not from "choice," but in obedience to statutes which accord the full rank of national money to gold alone. The second part is a matter of opinion : " Could such ' ' contraction if existing have been obviated or mitigated " by an increase in the supply of gold P " What is the meaning of " coin traction of the cur- rency ? " The history of the phrase is a long one. Originally applied to the various species of paper money, it is only lately, so far as I am informed, that it has been used to describe the event which I assume the Koyal Commission has in view, namely, a deficient supply of metallic m.oney. The distinctly artificial or conventional origin and character of paper money, which is admittedly a pro- duct of law and of governmental action, and the "quantity" of which is subject to governmental con- trol, import distinctions which are of vital import- ance in defining the new meaning of the phrase. Inasmuch as " contraction " implies that something is contracted, it is essential to have a clear understand- ing of what that something is ; and, the thing contracted being' plainly a quantity, it is necessary, in order to appreciiite the decrease in quantity, to have an idea what the original quantity was. What then is the starting point, the original quantity, the disappearance or non-appearance of a part of which makes the " contraction " ? In. the' case of paper money, created as it is, within the view of the public, it is a comparatively simple matter to come to an understanding. The case of metallic money is different. Not only is there neither precision, nor concurrence of opinion touching that which is indeterminate, but the principles relative to the subject are still to be agreed upon. Nowhere in the range of monetary discussion is there, in my belief, a greater lack or greater need of clearness. In order to an adequate treatment of Question VI., it is, therefore, necessary to establish some general views with reference to the quantity of metallic money. What then is the normal stoeJc of metallic money ? Three alternatives suggest themselves as giving 'the desired point of departures. A. The actual stock, in a given nation at a given time, let us say in Great Britain in 1874, may be taken as the original quantity, and a subsequent reduction of that stock may be regarded as " contraction." B. The actual stock in 187-*, plus an annual incre- ment (estimated upon some established rule) to be applied as due each subsequent year, may form the first term of comparison. A failure in subsequent years to enlarge the stock to the agreed extent will then be regarded as a deficiency. G. The supposed requirement (for any given year) may be fixed by the establishment of certain conditions to be fulfilled. Such conditions are, for example, suggested by the once universally admitted principle that money should be stable in value. The normal stock, then, for the period 1874-1887, would be that stock and increment which should have maintained the general average of prices at the level of 1874. A deficiency, then, existing by comparison with either of these three requirements might be regarded as a " contraction." Looking, however, to the practical objects which the learned lawgiver has in view, the re- quirement set forth in G. would be entitled to precedence. Of course, whether in . any given case it is in the power of the lawgiver to afford any remedy for a con- traction, from the point of view either of A., B., or G., is a distinct question concerning which nothing is said here [see below). In further explanation of the answer to Question VI., the subordinate query should also be stated whether a contraction is "injurious" or no, upon which point the considerations presented under Questions III. and V. are applicable. Answer. — The points elsewhere herein set forth touch- ing the peculiar effect of the breach of established parity between silver money systems, and gold money systems, and touching the relation of quantity to prices, and the causation of monetary changes, apply as reser- vations to limit and explain the following reply : Yes. England has so sufi'ered and is so suffering. The ex- perience of other gold standard countries is similar, but naturally not identical. For obvious reason I shall follow the question into detail in reference to England alone. A fall of prices (appreciation of gold), depreciation of property, derangement of the calculations of trade and investment, all upon a scale of importance attracting the attention of the lawgiver, are ascertained and are admitted. A deficiency in the normal stock of metallic money in England is also ascertained. The requirements set forth in the third mode of determining the normal stock (C) are evidently lacking. So, likewise, from the standpoint of the second explanation (B), there is a deficiency. Again, as to the actual stock of 1874 (A) , the evidence tends to sustain the belief that there is actually less metallic cash in England in 1887 than in 1874. That this contraction is injurious is apparent. This injurious contraction referred to could have been mitigated and probably obviated by an increase in the supply of gold money, but while it was not within the power of legislation to command such an increase by increasing the product of the mines, it was, and is (for the benefit of the future), within its power to obtain a similar result, in profitable degree, by reuniting the broken standard of silver and gold. Depinition op the Second Pakt of the Question. — The second vBxt of the Question VI. : " Could this con- " traction of the currency have been obviated or miti- " gated by an increase in the supply of gold " seems to supply its own answer. To whatever condition of things the phrase "contraction of the currency" may be applied, an increase of the supply of gold money must serve as the opposite and negation of it. As surely as subtraction is to be obviated or mitigated by addition, so surely does increase of money obviate or mitigate, or rather prevent, contraction or deficiency of money. The stress of the question seems therefore to lie in the degree of mitigation. How much effect will be produced by such and such an increase in the su2:iply of gold ? An increase in the supply of gold may describe two distinct events : (a.) An increase of the existing stock in the hands of man, or (6.) Such an increase as shall, under existing circum- stances, render an enlarged stock of money avail- able for a given nation at a given period, or, more definitely stated, [a.) An increase of the annual output of gold mines, and (6.) The occurrence of such a change in the condi- tions of supply or employment of money material that an increased amount of gold money comes normally into use in a given country at a given time. It will be observed that the second case (5) contem- plates a greater quota of change supplied to remedy or prevent a deficit than the first case (a). If we imagine the requirements set forth in (b) applied to England, it becomes apparent that the change re- ferred to must embrace the money-using world as well as England. The general conditions of supply or em- ployment of money materials which are to enable o-old money to flow into England will, therefore, demand attention. What is contemplated in Question VI., and APPENDIX. 83 Lhus in the answers to be made to Question VI., as a " contraction of the currency " is not an event occur- ring in isolation, but rather an event alone to be understood as a part, by means of an explanation of the whole. For money-using England, as well as for the money- using world, there are two money metals, nob one alone. The supply and employment of silver, and the ratio of exchange between silver and gold, are decisive factors in the monetary position of gold. With this observation the question of quantity of gold is brought face to face with an order of events distinct and, from some points of view, incommensurate. The breaking of the par of silver and gold, and the derange- ment of valuations arising in exchanges between silver countries and gold countries are, in fact, coiaparable to the invasion by one of the forces of nature, of the field ordinarily exposed to the undisturbed working of another force. The collision of coinage systems merits, therefore, a treatment quite distinct from the issues directly raised by Question VI. Suffice it to say here that the evils consequent upon that breach and collision are obviously to be in some measure remedied, and the future effects of that breach and collision can be entirely prevented by removing the cause, that is to say, by restoring equality between the metals. Without entering further upon this field, it is legiti- miate and important to explain that the answers to Question VI., although accepting the terms of " quan- tity" imposed by that question, make full allowance (if the definitions be clearly understood) for the pertur- bation due to the break of the parity and the subsequent clashing and conflict of coinages. The definition of the normal stock {see page 14), and of an increased supply of gold (6, see above) show that the narrow view touch- ing a " scarcity of gold" is here excluded. It is to be recognised that the peculiar effects of the break of an established parity do not eliminate the eleiaent of quan- tity from the monetary problem in the wider sense. What increased output of gold mines, or silver mines, would have been needed to cause a rise of silver prices in silver countries, which would have left gold prices where they stood before the divergence of the ratio ? Opinions may vary touching the required quantity (as well as the effect of such imagined output upon the course of trade, development of wealth, distribution of capital, &c.), but it will hardly be denied that in the scale of magnitudes some point could be reached where this imagined effect would be produced. Is it not quite probable that a repetition of such an experience as the great gold discoveries in Australia and California would have transferred the change of price-level from a downward movement of gold prices in the Occident to an upward movement of silver price in the Orient ? Turning from these speculations to the actual con- dition of the nations in the period 1874-1887, we can profitably seek to define the importance of the break- down of the parity formerly maintained by France and her allies. What would have been the condition of things if the par had not beeil broken? The question, what increased product would have come from the mines in that event is important, but can be laid aside here in order to simplify the issue. We assume then the par of 16i to 1 maintained, but the other great factors of the monetary situation of Europe, the pro- duct -of the mines, the expansion of the United States, the Indian railroads, &c., such as they have beenHin fact. Could the local subsidence of the valuations that are expressed in pounds sterling have occurred ? It is safe to say that the cause of the greater part of this subsi- dence would have been removed. But as Question IV. treats the position of gold money as a matter of quantity alone, it is germane to show that, from the standpoint of the legislator, parity is a factor of available quantity. VII. To what extent and in DehNITION. — (/See afeo Ques- what way are prices affected ,• -r s m, i^ "^tnn by the quantity of the metal j"",-^'^ -Lne pnrase stan- or metals used as standards oi dard of value ' in the above "^'^I'l^'^ question can only profitably be used as a synonym of money, just as the " metals " contemplated in it are gold and silver and no other, and " prices" is but a name for the respective equi- valents of vendible things in money units. If to regard a metal as a standard of value carried with it no actual employment of pieces of that metal for the uses known in fact as monetary, that is to say, if the metal were purely a term of mental comparison and nothing more, as might be the case if one were to consider, as a matter of cariosity, what a horse was " worth " in platina or in gallium, the question might be treated in a different way. There would then be no need of la*s of legal tender, of coinage, of banking, there would be no monetary systems, there would be no money, and no questions of currency, of monetary policy. But this is not the case. It is but a dreamland of the economic visionary to which this latter spiritual meaning of " standard of value" points. Money exists. The actual world of human society has always been, and is to day, a world of payments as well as of price. Price has, in fact, always implied action, the poten- tiality of action, of paj'ment ; it exists by contempla- tion of an actual exchange of one thing for another, and the one thing is the vendible object and the other thing is money, and it can be nothing else, except by favour of a license of speech which has no place in monetary discussion. Many prices are not paid, many exchanges are made without transfer of cash. Cash payments are but a fraction of the totality of transactions, and the rapidity with which cash does its work is a matter of surmise, but, notwithstanding, the nucleus of these comet-like phenomena is a solid fact in more than the purely material sense. There is a stock of cash, and with it some proportion of prices is paid. But between the actual amount of cash and the sum of possibilities of demand for payment (the totality of transactions), there is a broad space, so broad that it may well be likened to the furthest sweep of the comet in its flight, and it is in these interstellar spaces, so to speak, that the visionary flnds fields of fancy beyond the reach of the glass of a Montesquieu. The fatal attractiveness of this region of ideal money, of " money of account," or "metal used" mentally " as a standard of value "is well attested by the experience of to-day, there being no lack of minds that have Eaten of the insane root That takes the reason prisoner. Hence the necessity of a most rigorous course of definition. Question VII. relates, then, to the effect of the quantity of metallic money upon prices. But there are various distinct aspects in which ' ' the quantity of " metal or metals used as money " may be regarded, among which are : 1. The weight of the units of coinage. 2. The relation of parity between the two money metals. 3. The number of existing copies of the units. 4. The metal not coined which has a monetary use. 5. The metal which may be relied on to recruit the stock of money. The quantity of substitutes for metallic money is also an element of importance for any practical con- clusions. For purposes of clearness, then, treating the question in a practical way, it is necessary to contemplate some normal state of these elements of " quantity," and this can be conveniently attained by turning the eye away from the present amorphous conditions, brought about by the late revolutionary divorce of silver and gold, and regarding the conditions as they were before 1873, when parity existed between the metals, which affected the total stock. In this assumed normal state there was an increment, a yearly increase of the stock. We then apply Question VII. to the state of affairs as it was in 1873, 1863, 1853, 1843. There were " prices " in those years, and " prices " in the sense in which the word is used in Ques- tion VII., namely, the general mass, or average, of price of things vendible. We ask whether these prices would have been the same as they actually were if the world's stock of silver and gold in 1843, 1853, 1863, 1873 had been less than it actually was, if it had been half what it was, for example. It is well-nigh self-evident, that prices could not have been the same. Indeed, if we carry out the hypothesis with loyal fulness of statement, it will be plain that, in all probability, prices would have been only half what they actually were. If, on the other hand, we imagine an equal dimi- nution in the world's stock of any other form of wealth, the amount of money metal remaining what it was, we are led to a very different conclusion. Of course no one can answer the question in this form with precision. No one can answer Question VII. in any form with absolute precision. But the prevailing course of tendencies can be clearly stated, and if the elements of any given special case are carefully studied an approximately correct I. 2 App. I. 81 ROYAL OOMMTSSKiN ON GOLD AND SILVER App. I. conclusion can be formed. Despite all the fluctuations of business, the constancy of human nature and the inertia of the metals, and of laws, afl'ord ample material for practical decision. Answek. — The general tendency is that prices are in direct ratio to the quantity of money ; but this i^ a tendency, limited by factors which may be briefly indicated in the proviso, " other things being equal." As for the way in which quantity acts upon price it can be regarded as a special instance of " demand and supply." VIII. What is the relation, AnsWEK-. — I do not avail if any, between the supply or ™„„pif ,,f *},„ ormortunitv to quantity of the prcdous metals my Seir 01 ine oppui luni J and the fluctuations of credit ? enter fully upon this ques- tion, on account of the great extent of an inquiry into the multifarious and evane- scenT, phenomena to which it points. I venture, how- ever, to present some elementary observation.? which may be the more important, because they are not infrequently ignored. To affirm that there is no relation between the supply or quantity of the precious metals and the fluctuations of credit is, if the proper meanings be given to the words, an error, if indeed it be not actually a contradiction in terms. What are the fluctuations of credit ? An increase or decrease in the quantity of obligations expressed in terms of money, which obligations are often transferred or exchanged for a money price. Whether the relation of credits to hard cash be likened to the relation of a comet's tail to its nucleus, of the sun's corona to the sun, or of the earth's atmosphere to the earth, it must be a relation, and a relation of quantity. Whatever problems insoluljle in the present state of knowledge, these various relations may present to human curiosity, a considerable body of data has already been acquired which can not fear to be super- seded. 3o likewise in reference to the relations be- tween credit and cash, enoueh is knoirn to give security in dealing with the main practical tasks which are to-day incumbent upon the legislator. So far as the practical task ia concerned, to which the labours of the Eoyal Commission are directed, what is known of the relations of cash and credit can certainly afl'ord no valid argument against a settlement of the silver question by concurrent action of nations. IX. Has there been during AnS'VVBK. — As Compared the last 16 years any important _.-it, m-ppprlincr rlpnarlp« development of the system of ^"'1 , preceamg aecaaes, cheijues, hank credits, bills there has been ni the last of e.xchaiige, or other means of ^5 „ga,j.g ^g important de- economisiing tlie use 01 tne , ■' j. i> j_t li j c precious metals? velopment ot the methods 01 Answer. — Undoubtedly. ExPLANiTiON. — The exer- economising specie. Explanation. — It may be said, in a certain naiTOW sense, that an important development of this kind is always going on, for although, regarded as a whole, the movement may be checked or counteracted in times of war or panic, yet local expansion of specie-economising credit may have been present to minimise the flnai result. Among the most notable changes in the direction of economy in the use of the precious metals in lato years, I should mention — The telephone. The postal order system. The extension of the telegraph. The extension of railways. Question IX., as I understand it, demands a com- parison of what has occurred through these and similar agencies with what occurred before. This comparison seems to me to be clearly unfavourable to the later period. The earlier decades of the development of railways and of telegraphs saw more important changes than the latter ; the postal order system was preceded by great postal reforms ; and the telephone would perhaps operate rather to prevent the necessity of credits than to economise specie. Beside this, the great development of systems of banking and clearing belongs to the earlier period. The rate of increase of the ratio of money trans- actions to metallic stock has therefore probably been reduced of late years. The fact that prices have fallen in spite of the growth of methods of economising specie points in the same direction, for it is obvious that, so far as it may go, economising specie tends to promote a rise of prices. X. Do you consider that an ANSWER. — I do. internatioi'jil Ei^i-eenicnt could be made for tlu; free coinage of gold and silver as legal tender money at a Used ratio ? XI. Is it in the power of Governments to maintain such a ratio if agreed upon ; and , . . wonld the practice of the cise of power referred to IS m commercial world follow the gubstanoe identical with that which all Governments have been wont to apply with success. Touching the " prac- " tice of the commercial world," I assert in favour of an affirmative answer what in the law is known as an estoppel. The established opinions of all economists in a similar case should preclude them from wdthhold- ing their agreement with this afBrmaiion. This con- sensus of opinion has been so universal as to have been embodied in the name of a "law." The theorem known as " G-resham's law" is one of the common- placjs of economics, and the affirmative answer to Question XI. rests upon the same basis as Gresham's law. That law is but a generalisation touch- ing the working of human self-interest. Under the gravitation of self-interest men prefer what is crudely called the "cheaper" money to the "dearer" money. That is to say, men gladly part with that which they can most easily spare, and, inasmuch as everything which is paid is also received, it is plain that men are not unwilling to receive payment in anything which they can pay away again. All men are willing to make proflt in a monetary transaction ; there is a constant pressure in that direction among money-using men, just as every part of a body of water is always pressing down. This is the controlling fact ; this is human nature. But this downward pressure of water has two distinct lines of manifestation, the one where resistance is complete, the other where resistance is incomplete ; the latter being the current, the fall, movement, tend- ing toward the perpendicular, the former the smooth level of the lake, quiescent horizontal. It is the fall which is bodied forth in Gresham's law ; quiescence in the law I vindicate. The one is the law of disparity, the other is the law of parity. As gravity, operating upon the enclosed waters of a lake, establishes and maintains a level surface, so this gravi- tation of self-interest maintains parity. The desire, the pressure, exist, but are neutralised by opposing desire, opposing pressure. For the one and the other the resistance, the enclosure, is necessary ; that is all tiiat is required for either money or water. Whether it be pond, lake, or ocean, if the enclosure be there, the level surface is inevitable. Whence comes the strange parity between cheap bronze pennies, light silver shillings, solid gold seve- reigns, and paper promises to pay five, or a hundred, or a thousand pounds ? Evidently the English lake is well embanked around by English law. If analogous enclosure be given to silver and gold money by the monetary laws of nations, a similar level of parity will be produced and maintained. This can be done by giving the two metals equality before the law in a strong body of nations. Xll. Wliat would be the Ansu'ek.— In reference to effect of ^ucn an :igreement, it j.t, i.- j i.- o carried out, upon (n) prices, ^"^ respective production of and (6) the production of the the two precious metals, the pr*ions medals? current estimates of pro- babilities point to a diminished output of gold and to an increased output of silver. The restoration of silver to monetary equality with gold, presumably at a higher ratio than has obtained of late years, would tend, within limits, to stimulate its production; but the estimate of amounts of increase are frequently exaggerated, sometimes to a preposterous degree. An impulsion to business activity would also tend to enlarge the range of gold mining, and hence to increase the output of gold and to restore the balance. So far, then, as the; annual product of the money metals is concerned, the total effect of joint 'action of nations to equalize them, must be to relieve the mone- tary interests of nations from evils connected with that source; connected, that is, with a prospect of wider divergence between the metals, and of an increasing intensity of employment or demand for a limited stock of gold. The practical sense of this danger exists in many quarters, where its scientific weight has not yet been formally recognised. This will appear of, we imagine, the effect of really important gold discoveries. Is there any doubt that they would be hailed by economists as a relief? Can it be denied that they would bring a certain I'elief ? (I refer, of course, to such discoveries in their character, not of an increase in the world's APPENDIX. 85 slock of wealtli of capital, but in the ■world's stock of money of circulating treasure. So far as the former character is concerned, the increm.ent in gold would count no more than the same figures in silver or in steel.) But if this be true, of what avail are incanta- tions of cnsaistry to exorcise the " appreciation of gold P" Whatevei- relief could be wrought by gold discoveries which are not to be had can be attained by intermonetary union which is to be had. In reference to both prices and production of metal, the effect would be in some measure dependent upon the ratio adopteJ. " Of the probable effect upon prices of the establish- ment of H, ratio, which shall bring the metals more closely together than they stand as bullion to-day, while detailed predictior can at best move within but narrow limils, yet in general it can safely be afBrmed that (assuming the currency of existing silver coin, to remain undisturb >d), this change would directlj' ope- rate chiefly upon trade bet-\vecn silver-using and gold- iising countries, and upon the great stocks of money only in so far as their purchasing power is afTected by the state of this trade. So far as such trade is con- cerned, it is also to be noted that no injurious effect can be safely predicated, in the estimate of which the following points shall have been ignored ; namely : — " First : That the change in question is, as far as it goes, a restoration of the status quo ante. "Second: That its impact is reduced by being dis- tributed between the two metals. " Third : That in so far as the change is regarded as a settlement, and firm establishment of the fonndations of business, there is some credit entry against every debit, a counterclaim for betterment which in goodly measure offsets each item of damage." If the ratio of 15J to 1 were restored, the existing silver in the hands of man must remain ('it situ. (I assume that the United States adapts its silver coin to the new ratio.) The silver coin in gold-money lands is in use at its faoo value, and the silver coin in silver- money lands is detached from gold, connected with it only by flexible cords of trade. What, then, are the specific dangers to Btirope other then a rise of "the " price of gold in the money of the country" InMeiioo or Buenos Ayres or Bombay, &c. ? Is it the return of confidence that is feared p In that case measures can be taken to prevent undue expansion, and such measures could legitimately form a part of the programme of a monetary union. But exaggerated views which represent the founda- tion of an intermetallic union as importing a monetary convulsion, are in many cases explicable through the analogy of an optical illusion. The inference touching the future is from what is past and known, and what is past and known is naturally regarded, as it were, in one pictare ; as, for example, all the depressing ele- ments of the last 13 years may be crowded into one frame. A restoration of the united standard is regarded as the reverse of all this, and contrasted with it on even terms, except that the element of time is left out of sight, so that everything is imagined as happening suddenly, at one stroke of the magician's wand. Hence exaggeration ; which easily rises to any height of error. It thus becomes important to observe that the nations which are to bring their laws into concord, and give legal equality to the two metals, will themselves deter- mine the Reasonable terms and times for this action, and are not likely to act with undue haste. It also is necessary to recall that the years which have passed since 1873 are past, and with ' them have gone their "might have-beens." For instance, the money metal that " would have been " mined, and was not mined, in these 13 years to enrich the world's stocks, is to be mined in the coming years, being next in the lode, and it will need years to mine it. These too obvious re- marks are called for when the alchemy of learned fancy is in vogue by which that metal is ' ' taken as mined " ' just as a resolution in a deliberative body is some- " ' times taken ' as read." XIII. Do you consider an international agreement for bi- metallism possible on any other ratio than 16i to 1 ? Definition. — ^I assume the word "bimetallism" here to mean free coinage and full legal tender of silver and gold at a certain ratio (see also Definition XV.), and that the word " possible " is taken in the sense in which it is usually applied to political events. Answer. — Yes. Explanation. —No opinion is here implied upon any details of probability, whether at Berlin, Paris, London, or Washington. The question of the ratio stand in the second rank. The first interest of the nations is concurrence, by which the status of the money-metals maybe fixed. The i-atio is a matter upon which any nation can afford to make concessions to the needs of others. At the Monetary Conference of 1881, the declaration on this subject of the delegates of France and of the United States, made in the name of their respective G-overnments, was as follows : — "Any ratio, now or of late in use by any commercial nation, if adopted by such important group of States, could be maintained; but the adoption of the ratio of l.^i to 1 would accomplish the principal object with less distui'bance in the monetary systems to be affected by it than any other ratio. " Without considering the eifect which might be pro- duced towards the desired object by a lesser combina- tion of States, a convention which should include England, France, Germany, and the United States, witii the concurrence of other States, both in Europe and on the American Continent, which this combination would assure, would be adequate to pioduce and main- tain throughout the commercial world the relation between the two metals that such convention should adopt." App. I. Deeinj'hon. — By the words ■ international bimetallic XiV. I'ailiiig ail iuteniational bimetallic asreeitent, what mi'abures could be adopted by the commerfif.l nations of the " agreement" as here used world lov giving increased sta- t ,m^pva+Tnrl n trpat-r tjnn bUity to the relation between ■■- unuerstana a treaty, sup- gold and silver? ported by appropriate legis- lation, for free coinage of silver and gold as full legal tender at one ratio. Answer. — Measures establishing a steady demand, and especially any measures (short of the treaty above referred to) tending to establish a fixed gold price foi silver, would, if moving in concurrence, tend to increase stability, but would of course be liable to be counter- acted, by fiuotuation in the output of the mines, and by changes of employment for existing metal used as money, &c. XV. It is argued that.in the DEFINITION.— Current uses absence of bimetallisru, the „p ,■>„ „„ j «< i ■_ j. n- ,» effect of any disturbance of of t^e WOl'^ bimetallism . the currency is limited to hall attach to it such a variety the currencies of the world, ^.f rnptinincrQ tVint ^^^ TPnlir and thereby increased in ?^ meanings toat in reply- intensity. Do you consider this mg to (Question A V . it seems view correct; and, if so, do you desirable carefully to define thmk the evil a serious one ? , n ■ i ■ i ■ j , the sense m which its terms are understood. The actual condition of the monetary systems of the word which I suppose the Eoyal Com- mission to have had in view is that which exists while the " currencies " are deprived of the benefit of laws of alternative or optional free coinage of the two metals, which establish their practical interchangeability at a fixed ratio. Such a condition has lately beeii brought about by anti-silver statutes repealing such laws of equalisation of the two metals, and must continue until new laws of equalisation shall be passed in a body of nations sufiiciently strong to attain this end. But the absence of such laws of equalisation does not in fact import to-day, and is not here contemplated as implying, in the " currencies of the world" the absence of silver money or of gold money, nor the absence of full legal tender power, nor the absence of freedom of coinage, for either metal; so that whatever " two metallism " or ' ' bimetallism " may be regarded as implied by these facts is still present, and to remain. Question XV., therefore, embodies a comparison between the " cur- rencies of the world" as they have been of late years, and as they formerly were (or would be again) under guarantees of intermetallic parity. Answee,. — The establishment of permanent parity between the two money metals must impart a certain fluidity or elasticity to the moneys of the world, which would act as a wholesome air-brake to deaden the shock of such disturbances as seem to be contemplated in the question. This, however, does not assert that anything more than the primary impact can be limited to one metal, or to the nations whose monetary laws attach the prin- cipal monetary interests of citizens to that one metal, or that in the present state of instability the area of 86 EOYAL COMMISSION ON (lOLl^ AND SILVER Api'. I. ■'he other metal can be held safe against the propaga- tiofl of disorder originally arising in the other's domain. So far as the evil is concerned it is at least sufficiently serious to recommend the relatively trivial effort re- quired to prevent it. XVL If the effect of such dis- DeI'INITIOM". — At first glance turbances could be spread over ;t would not appear that the all countries, would greater sta- n p t , ^^ i n bllity of the standard of value spread of disturbances could be secured thereby P serve toward securing greater stability. Bat I assume the question is only intended to convey the idea of greater stability than is attainahie under certain oiroumstances. And, as is explained in the preceding section {XV. ), this implies exposure to the first impact of some distarbauces and to tho re- bound of others. It is further to be observed that although the question is stated in the most general terms it presumably refers to the actual condition of things to-day. The question has in view the future of the countries which now have gold as their ' ' standard of value " to the extent of excluding silver from free coinage. It can thus be stated as follows : could Europe and North America attain greater monetary stability or protection against "monetary disturbances" if the metals were fused into one united standard, a measure which would give gold, the lighter, the advantage of being ballasted, as it were, by silver the heavier metal, amid the winds and waves of monetary disturbance. Answer. — Yes. The United Standard would give Europe and America greater monetary stability than the Disunited Standard. Apr. II. APPENDIX n. Peoposai, for an International Convention fixing a ratio between Silver and Gold, submitted for the consideration of the Royal Commissioh by Mr. Samuei, Montagu, M.P. 1. In order to give stability to trade with silver- using countries without hindering the importation of wheat from. India or unduly raising prices, it would bo advisable to fix internationally the ratio at 20 to 1, a most convenient ratio, as most countries have gold coins 20 times the value of silver coins. 2. Duration of treaty should be at least 20 years. 3. The convention should contain three conditions : — (a. ) All the contracting G-ovemments must maintain identical mint regulations, (i.) A mint charge should be imposed on the metal brought to the mints of (2d. an ounce on gold) \d. per oz. on silver. (c.) Each Government -must be responsible for the silver coins issued by its mints, and if at the end of, say, 19 years a year's notice be given for withdrawal from the convention, the Government so withdraw- ing must exchange for gold or its equivalent its silver coins existing in other countries. 4. All State Banks and the United States Treasury should be required to purchase and sell silver in the same manner as is now the case with gold, thus there would be no actual necessity for increasing the circula- tion of silver. 5. With the consent of all the contracting powers the ralio could be eventually altered to 154 to 1. Explanations as to the probable effect of the proposed Convention in the following principal countries : — England. Thechief importation of silver into this country would be in the form of bars, because owing to the mint charge of ^d. per oz. silver coin would be over 1 per cent, dearer than bar. If the exchange, say, at New York, showed a profit on specie remittances to this country, and if there was an available stock of bar silver obtain- able at a cheaper rate than gold, which is hardly probable, as silver would usually be in special demand for India and China, silver bars would reach London as an exchange operation. Such silver would generally command a premium here over the Mint or Bank price either for immediate or future shipment to the East or to the Continent of Europe, but should there be no such demand it would be sold to the Bank in the same manner as now obtains in the case of gold. "Whenever the exchanges turned against England the silver would be bought from the Bank at, say, y'j-d. per oz. advance over the Bank's purchasing price, and exported instead of or equally with gold to any country to which we would be indebted. Should an increase in our silver currency be necessary the Bank would coin the silver at the Mint into new 4s. pieces or dollars at the ratio of 20 to 1, paying the Mint the seignorage of hd. per oz., which would have been allowed for in the Bank's purchasing price, thus bar silver would fetch at the Bank JcZ. per oz.less than the value in silver coin. The existing jubilee 4s. pieces should be called in and recoined into 20 to 1 full weight coin, which would be a full legal tender. Our token silver would circulate as at present ; in would, however, be prudent to increase its weight by about 10 per cent., to prevent illegal coining with good silver. The Bank of England would issue notes against the silver held, it would be desirable that a portion of its issue should be in one pound notes. .Teance. The French like other Governments would be bound by treaty not to melt down its silver coins for expor- tation, there would be no temptation to infringe this agreement, as the loss would be very great unless silver advanced in price through some extraordinary demand or great scarcity. If the Erench exchange showed a profit on specie cxportations, bar silver, if any stock existed, might, as in the case of the United States, be used in the same way as gold, otherwise gold would be sent. No doubt the Bank of Prance would part with gold more readily after the execution of the convention, because apprehensions of its scarcity would disappear. Silver would be the metal generally in requestj owing to the great development of trade with silver-using countries. Eive-frEinc pieces would circulate on the Continent as now ; they would rest upon a more assured basis owing to the establishment of a fixed ratio. The Bank of Eranoe would, like our Bank, purchase bar silver and issue notes against it. In the improbable case of more silver currency being needed, a new coin could be struck, say 2| franc pieces at 20 to 1. Geemany. Germany might be bound by treaty to coin her exist- ing stock of bar silver, estimated at about 20,000,OOOZ. into token money, or into new four-mark pieces, at the agreed ratio of 20 to 1. The seignorage of Jd. per oz. would prevent the foar-mark pieces being exported unless the country should be denuded of gold, a very improbable event. In case of war Germany would have a far larger command of gold than was the case in 1870- while silver is also useful for war purposes. In India silver only is used. APPENDIX. 87 Amekica. Amei'ica being a silver-producing country ■vrould bo probably affected as follows : — A mining company would generally have a better employment for silver, through orders for India and China, than at the nearest mint. If silver currency were needed, or if orders were not forthcoming and the exchange did not permit of bullion exports, the company would coin its silver at the nearest mint, and oircnlate full weight 20 to 1 new half dollars. The United States might call in the Bland dollars and issue instead full weight dollars at 20 to 1, but the Bland dollars might circulate as now as token money, like existing five-franc pieces in France. The United States would, however, not lose much by recoin- ing the Bland dollars, as they were coined from silver bought at low prices. Should the exchange rise so as to admit of bullion shipments, bar silver, bar gold, or full weight gold coin would be selected. Gold being easier manipulated and cheaper packed would occasionally be preferentially used. Some bar silver would be sent to England in the expectation of a premium being obtained. It has been argued that although the minimum price of silver would under this convention be fixed at about 47d., fluctuations might arise through a large advance in the price of silver beyond its minting price in the "West, and from that advanced price variations raight frequently result. In reply to this objection it is alleged that a sufiicient supply of silver would be obtained through the suspen- sion of the Bland Act, thus releasing annually for general use about 4,000,0002. of silver, also further supplies could be obtained from the existing circulation in Austria and from those countries where silver would be coined at the new ratio of 20 to 1 . India and China could remain, as now, monometallic in silver. The fixing a ratio of about 20 to 1 would facilitate the resumption of specie payments by fiusaia, Austria, and Chili. The only serious objection which I have heard raised •against this plan is, that the great powers, especially France, would not agree to a ratio of 20 to 1, on account of the great quantity of five-franc pieces held by the State Banks, and in circulation in the countries comprised in the Latin Union. Why should France object, she need not recoin her five-franc pieces, for the 20 to 1 ratio would raise the price of silver to about 4i7d.., thus rendering tor silver currency m.ore stable ? Again, the ratio of 20 to 1 would not only fix a minimum value of silver of about 47rf. instead of 44 as at present, but it would prevent the possibility of a further fall such as we have seen recently when silver dropped to 42d., whereas if no ratio be fixed silver might reach far lower depths. As no very large quantity of silver could be had at low prices, if special demand increased or the output diminished, the old ratio of 15^ to 1 might eventually bo fixed with the consent of all the contracting Powers. App. II. Eelative PaioE op Shvee to Gold. Gold standard 916f/1000. Silver Standard 925/1000. Entio. Gold at 77s. 9(f. per oz. Standard, Bank or Mint Buying Price. Gold at 775. lOia. per oz. Standard, Mint Coining Price and Bank Selling Price. 155 to 1 d. 60'740 peroz. std. d. 60-838 per Dz. std. 16 „ 1 tA-iii 58-930 17 „ 1 65-380 65-470 18 „ 1 52 -301 52-389 19 „ 1 49'6ol 49-631 20 „ 1 47-074 47-119 21 „ I 44-832 41i-!l04 OuT-TUEN OF Bah Silver in India. Price in London per oz. Standard. Prico per R-upee in India, Ratio About d. 44 S- d. 4-8S3 21i to 1. 45 6-2a6 21 to 1. 46 6-650 47 6-034 20 to 1. 48 -, 6-417 49 6-800 ID tol. 60 7-183 61 7-560 53 7-949 18 to 1. APPENDIX II r. Memoranda submitted to the Commission by Mr. Claemont Daniell. Aim-, hi. (i.) Memorandum on the Question- whether the Cheapness of Silver in Gold stimulates Indian Exportations or does not. ' The opinion is held in some quarters that the relation of value prevailing during the last 15 years between gold and silver has given an advantage to gold using countries in their trade with those using a currency of silver and no gold. Silver having fallen by the gold standard in value from 20 per cent, to 25 per cent, in that period, and Indian prices having remained steady, or declined, it is held that, owing to the increasing cheapness of silver, not being accompanied with a corresponding dearness of commodities in the silver money, say of India, any given sum of gold buys more and more silver rupees, and therefore more and more of the productions of Indian industry. In this way the cheap silver is said to " bonus " India produce in export trarlefrom that country to England. This has been stated over and over again in the contro- versy on bi-metallisra ; quite lately in the following passages from a pamphlet and a speech which I refer to, as a con- venient way of showing the point of view from which the mfluence of cheap silver on the export trade of India is widely regarded. ^^ Speaking generally," writes Mr. M. Frewen, " every fluctuation of one penny in the rate of exchange is equiva- " lent to an alteration of 17rf. per quarter in the sellin-' ' price of wheat m England ; in other words, the cheapening of the rupee from 22rf. to 16rf., the recent minimum 88 ROYAL COMMISSION ON GOLD AND SILVER: Ai'p III " P''ice, has forced down the price of wheat by nearly 9s. " per quarter, and in effectinpf this has depressed the " market value of the 400,000,000 bushels of wheat raised " iu ihe United States to the extent of a shilling a " bushel." The same writer, in a speech delivered at Bristol in, I believe, the month of April, spoke as follows : — " I have now made a short and imperfect survey of the question of tlie a|)preciation of gold, and I think it is not open to doubt that in consequence of an immensely in- creased area of demand, and a diminished supply of gold in currency, prices in terms of gold are falling. I'lien comes the question which is hardly less important — what is the present position of silver, and what share has the fall in the price of silver in the present " 0-38 0-40 0-50 1- Gambier . - - „ 0-30 0-32= 0-30 0-30 Soja . - - - Liter 0-30 0-375 0-30 0-40 Spices . - - Kilogram 0-50 1-50 0-38 1- Cocoa-nut oil Liter 0-30 0-40 0-40 0-60 Soap, white ... Kilogram 0-25 0-18 0-10 0-25 Candles, stearine » " 0-75 1- 0-.50 1- TABLE D. Rates of Wages of Coolies (Labourers) and Handicraftsmen (Skilled Labourers). Batatia. SAMAEAUa. SOUEABATA. PEEAHeEE. SOEEAKAEIA. Pasoeeoeait. Coolies. Skilled Labourers. Coolies. Skilled Labourers. Coolies. Skilled Labourers. Coolies. Skilled Labourers. Coolies. Skilled Labourers. Coolies. Skilled Labourers. 1874 50 ICO 40® 60 70 @ 160 30® 60 100 ® 160 20 ©25 30® 60 30® 60 78 ® 160 30® 60 ' 60 @ 100 1877 26® 80 75 @ 250 60 @ 100 80 @ 200 35 ® 50 80 ® 150 15® 25 40® 75 30® 40 60 @ 160 25® 60 60 ® 100 1880 60® 60 75 @ 260 40® 75 70 @ 200 35® 60 80 ® 200 20® 60 50 ® 100 30® 60 60 @ 160 35© 60 60 ® 100 188-2 25® 80 76 @ 300 40® 75 70 ® 200 36® 60 80 ® 200 20® 40 50 ® 100 30 ©60 60 ® 160 50 ©100 60 ® 260 1883 25® 80 75 @ SOO 40® 75 70 ® 200 35® 60 80 ® 200 20® 40 60 @ 200 SO® 60 60 ® 150 60 ® 100 60 @ 260 1884 25 ® 100 60 @ 300 25® 60 60 ® 200 35® 60 80 ® 200 20® 26 50 @ 160 30® 60 60 ® 160 25® 70 30 ® 260 1885 20® 60 100® 26® 60 50 ® 200 20® 60 80 ® 225 20 ©25 25® 75 30® 60 60 ® 160 25® 70 SO ® 250 o hidiS. N 98 ROYAL COMMISSION ON GOLD AND SILVER: app. vn. APPENDIX VII. Memoeandum on the cause or causes of : Ist. The world-wide fall in the gold price of silver and the rise in the silver price of gold. 2iid. The fall in the prices of commodities generally in Great Britain since 1873, by John Henry Norman, November 1887. 1. I am convinced that the sole cause of the world- wide fall in the gold price of silver, amounting now to 25'57 per cent.,* and the rise in the silver price of gold, amounting noTS to 33'93 per cent., is the closure of the mints of the countries forming the Latin Union and the United States of America against the unlimited reception of silver from the public. 2. I am equally convinced that the chief cause of the fall in prices generally in Great Britain since 1873 is distinctly traceable to the fall in the gold price of silver. 3. Before advancing reasons for these opinions I would advert to a prominent and very important statement made by Professor A. Soetbeer in his excellent publication " Materialen," to the effect that the "elemental might" of weights of standard metals is seen in the rates of exchange and in the actual trans- mission of standard metal in satisfaction of international balances, t This so entirely supports the view which I have long taken of the standard substance for currency purposes that I do not hesitate to make this statement, that wherever there is a monetary system which is based upon an effective metal standard,^ there prices and rates of exchange are denominational expressions of definite weights of standard metals, and that these weights as weights alone constitute prices and rates of exchange, and are ordinarily the true measures of value and at all times the means of payment. All in- strumeiats of credit, including legal tender banknotes, are money tokens, and but signs of the standard sub- stance which alone is true money. 4. To illustrate the elemental might of weights of stan- dard metals, the working of exchanges of commodities through the instnimentality of price, and by means of barter, I present a concrete case of exchange between England and India of Manchester shirtings for wheat. I assume that prices of commodities have fallen in Great Britain, and that they have remained stationary in India, that the transport and all other charges are the same now as they were in 1873, but that the exchange in 1873 on India was 22'65 pence per rupee, and that it is now 16"75 pence per rupee. § This fall in exchange is 26 per cent. Under the fall of exchange, before experience taught what the result would be, it • The average price of silver in London for the year 1873 was 69J pence per ounce, and it is now 4i pence per ounce. t Tlie tollowine are the per-centage total imports and exports of gold and silver upon tne total import and export trade of Great Britain in commodities, on figures furnished by the Board of Trade. Averages of periods of five years ended in 1883, 14-4; 1868, 9- ; 1873, 9-1 : 1878, 9-9 ; 1884, 5*9. The average yearly movements during those periods have ranged from 41,299,000?. in the period ended in 1884 to 03,323,000;. in the period ended in 1878. During the eight years ended in 1886 there has been an excess export over import of gold of 11,318,000?., against an excess import over export of gold of 76,249,000?. during the previous 20 years. In the 28 years the excess import has been 63,981,000?. Taking the annual requirements of Great i^ritain for other than currency purposes at 2,500,000?., it would' amount to 70,000,000?. in the 28 years. t I mean by an effective metal standard that all money tokens are readily convertible into the standard. I ventured to define the terms and conditions of a sound automatic standard currency. It is briefly this : The substance selected for the standard must be received in unlimited quantities, and coined and certified by the State, be appointed unlimited legal tender, and be preserveo. in an effective state. At a meeting of the London Chamber of Commerce, held on the 18th January last, at which I read a paper upon " The present position of the world-wide currency dilemma, &c.," Lord Bramwell, who was in the chair, approved of this definition. § In 1873. Grains of 3,000 pieces of Manchester shirtings at Fine Gold. 7s. lljd., or 44'8476 grains of fine £ s. d. gold, per piece, with freight to India 1,190 12 6 or 134,642 • 5 Insurance on 1,200?. - - - 4 10 „ 608 "5 1,195 2 8 „ 135,061-0 Exchange at 2a'65 pence per rupee, or 10"664 grains of fine gold per 165 grains of fine silver. 135,051 grains of flue gold divided by 10"664 grains of fine gold gives 12,663 '26, vphich is the number of rupees. These, multiplied by 165, give 2,089,438 grains of fine silver. 8ale of these /Shirtings at Kurrachee. Grains of Fine Silver. Es. a. p. 13,663 4 9 or 2,089,438 was the wheat exporters expectation that the decline in exchange would ensure him a profit upon his wheat shipment to Great Britain equal to the difference in the fall in the exchange ; and the Manchester manufacturer uttered loud lamentations that the fall in exchange with India would cut him off" from supplying the Indians with piece goods. In these two instances of interchanges of commodities in 1873 and 1887 which I have given at foot, we have powerfully illustrated, 1st, " The ele- mental might" of weights of standard metals, which is shown by the forced fall in the prices of piece goods and wheat in a gold standard country, to meet the fall in the gold price of silver. 2nd, The conditions of value. The same length of piece goods and the same weight of wheat of equivalent quality were exchanged in both cases, because these quantities depend upon the expen- diture of value-giving factors which might have re- tained the same relation in both instances. 3rd, The conditions of price. In the one case 135,051 grains of fine gold had to be given for 3,000 pieces of shirtings, and 784'627 quarters of wheat realised 135,051 grains of fine gold. In the other, 99,929'85 grains of fine gold had only to be given for 3,000 pieces of shirtings, and 784-627 quarters of wheat sold for 99,929-85 grains of fine gold. These changes in the gold standard country are accounted for by the measurable fall in the gold price of silver. In the silver standard country during the two periods 2,089,438 grains of silver made up the prices of the piece goods and the wheat respectively. The pressure for the adjustment of prices of goods whether in gold standard countries from silver standard countries, or in silver standard countries from gold standard countries necessary upon the fall in the gold . price of silver and the rise in the silver price of gold Say that this silver is invested in wheat for Great Britain :— Grains of 784-627 quarters wheat at 14rs. 4 ann. 10 pies or Fine Silver. 2,359 "725 grains of fine silver, per quarter, free on board .... . . 1,851,504 Freight to Great Britain, per quarter 3s. Id. = 20-246grain3ofgold, or 313-246 grains of silver - 237,934 2,089,438 The rate of exchange being 22-65 pence per rupee, or 10-684 grains of fine gold, for 166 grains of fine silver. 2,089,439, being divided by 165, gives 12,663-26 rupees, and these, divided by 10-664, gives 1,195?. 2s. 6d, Sale of Wheat Free of all Charges over the Ship's Side in Great Britain. Grains of 784" 627 quarters at 1?. 10s. bid., or Fine Gold. 172-108 grains of fine gold per £ s. d. quarter - - - 1,195 2 or 136,051 In this instance of exchange it is seen that 3,000 pieces of shirtings, costing 135,061 grains of fine gold, sold in India for 2,089,438 grains of fine silver, which, invested in wheat, &c., produced 784-627 quarters, which sold in the United Kingdom for 135,051 grains of fine gold. The rate of exchange for converting the gold into silver and the sUve'r into gold being both the same, 22-65 pence per rupee, and one rupee for 22-65 pence. In 1887. 3,000 pieces of shirtings at 6s. Whd., or 33-198 grains of fine gold per piece, with freight, &c. to India Insurance ... Grains of Fine Gold. £ s. d. 881 5 or 99,696-97 2 18 10 „ 332-88 £884 3 10 3,000 plcees at 4 rs. 8 ann. 7 pies or 696'479 grains of fine silver, per ?iece net price, less freight and all ndian c)iarges Exchange at 16-75 pence per rupee, or 7-886 grains of gold, for 165 grains of silver. Divide 99,929-86 by 7-886, and the result is , 12,663-28 rupees ; this, multiplied by 185, gives 2,089,438 grains of silver. It is unnecessary to repeat the sale of the shirtings and purchase of wheat in India, the figures being the same as in 1873? wi.«o v Sale of Wheat in Great Uritain. 784-627 quarters, over the ship's side, at Cin\A 11. 2s. 64d., or 127-369 grains of gold, £ s. d — — per quai-ter . 884 S 10 or 99.929-85 In this instance it is seen thaJb 3,000 pieces of shirtings costine 99.929-85 grainsof gold sold in India for 2.089,438 grains of silve?™! that 784-627 quarters of wheat, in which the proceeds were invMfed sold in Great Britain for 99.929-86 grains of goli The rate of exJhS for converting the gold into silver and the silver into gold beinB both the same, say, 16 -75 pence per rupee. * "'"^ ooin APPENDIX. 99 found expression in the fall in gold prices of piece goods and wheat to meet the equivalent decline m the gold priceof silver. 5. My reason for asserting that the fall in the gold price of silver is due to the closure of certain mints against the unlimited reception of it from the public, are : The certainty that if one country such as the United States of America — ^not Jersey — opened its mints to- morrow to the unlimited reception of silver from the public at the relation of 16 parts of silver to one of gold, exchange with India would immediately return to the rates prevailing between gold standard countries and that country before 1873. The certainty that if the Bland Bill should be abro- gated, the gold price of silver would at once further fall, possibly considerably below 30 pence per ounce in London. The present comparative average cost of the produc- tion of gold and silver, so far as can be ascertained from American state-printed documents, and testified to by the President of the Colorado Silver Alliance, with regard to silver in Colorado, and with reference to gold by the Mears' Ohlorination Company of the United States of America for the whole world is nearer 100 parts of silver to one part of gold; in which opinion a leading American expert concurs. The evidence given by Professor Eoberts-Austin before the Eoyal Commission last year that the average cost of producing silver measured by gold is 44 parts of silver to one part of gold. The absence of evidence that this sudden cheapening of the cost of the produc- tion of silver commenced in 1873. But there is evidence in the enormous wealth of the silver kings and the anxious desire which existed in certain quarters long pre ■ vious to 1873 to make Great Britain one of the dumping grounds of cheap silver that the present proportion of 21 '4 to 1 is vastly diflerent from the true proportion. The high probability that Some silver Trust has been manipulating the British silver market ever since the Bland Bill contained the canny provision that the United States of America mints must buy ^2,000,000 and not more than ^4,000,000 of silver per month on the London market price of the day.* 6. There may be many causes for the decline of prices generally in Great Britain since 1873. Three among them which are on the surface have been much exa- mined; and each has its advocates of ability and expe- rience in monetary matters. The three are : 1st. The appreciation of gold, as caused by a diminished supply of that metal for currency purposes, together with a fresh distribution of it as between different countries using it for currency purposes. 2nd. A diminution of the cost value or over-production of commodities gene- rally. The meaning of this is : That there has been a diminution of expenditure of value-giving factors such as labour, rent for land, or shelter, machinery, the use of capital and all other factors that give value, on the production of commodities. Or that commodities gene- rally are being sold at an exchange value below their cost value. 3rd. That the fall in the gold price of silver has been the chief cause of the decline in prices gene- rally in Great Britain since 1873. After advancing reasons for holding the opinion that the fall in the gold price of silver is the prime factor and measurer of a large portion of the decline in prices in Great Britain, notice will be taken of the two other alleged causes. . . , 7. Gold as a measTire of value in Great Britam has since 1873 been completely thrown out of gear. Price, or a definite weight of gold, should be a measure of the cost and sale values of commodities within a narrow margin of fluctuation in ordinary times. f It was not so in the period of vast additions to the gold currencies of the world nor in previous periods of history when the standard was mostly silver, and vast additions of that metal were made to the currencies of the world. These were catastrophic periods to all States and peoples in- terested in deferred payments, but a matter of little moment to the working classes and all interested in current interchanges connected with industrial life. For if a high price was obtained a high price had to he paid. • IhovLsh the TjDited States of America took into their currency SSiSOOof of silver last jear against an average during the preceding five vears of 5 621,000J. ; the average price of silver was never lower than last year, and so far vastly lower prices do not appear to diminish the production of the article. „ ., , . ., tThis narrow margin results from the vast mass of metals aacur- rpncv to be acted upon under the ordinary laws of supply and demand. Thenresent dislocation between gold and silver is the result of the break-down of unwise legislation which assumed to control economic forces. If a low price was obtained a low price had to be paid.* App. VII. It did not aifect to diminish or morease quantities or lengths of commodities for quantities or lengths of commodities. Such is the position of this country's measure of value now in an inverse sense, and brought about by an entirely difi'erent cause. All the time that there has been an unnatural alliance between gold and silver proil uced by the legislation in a group of coun-^ tries, that 15^ parts of silver shall be equal to one part of gold, and in another country that 16 parts of silver shall be equal to one part of gold, and the pressure of the cheaper metal at those relations did not overbear the law and destroy the action, the debasing influence of cheaper upon the dearer metal was masked. At the same time prices in the western world were based upon the joint action of both gold and silver. In the instance of exchange of piece goods for wheat we saw that the shipper of wheat expected that from the decline iu the exchange he would be able to reap the benefit of that decline in securing the same or the approximate price for it in Great Britain as before the decline. He found that he got no more than his ordinary profit. The Manchester merchant, arguing upon the theory which he had been taught, that in the event of a decline in the gold price of silver there would be a corresponding rise in the silver price of commodities in silver standard countries, finding no rise in the value of his piece goods in India, in the midst of his lamentations discovered the gold price of his piece goods in Manchester declining to an adjustment with the stationary price in India, and his business proceed as before. These adjustments are due to the elemental might of weights of standard metals. Assume that the United States of Ainerica open their mints to the unlimited reception of silver in the proportion of 16 parts of silver to one part of gold. The London remitting rate on India would at once become approximately Is. lid. per rupee. On this the pressure for the re-adjustment of prices of a very large number of articles — all those from silver standard countries — would immediately commence. This pressure might result in a return, in large measure, to the prices of 1873 in this country. This might be the pressure in one direction. But for the past six years it has been the general impression in London, that on the abroga- tion of the Bland Bill silver would decline to 30 pence per ounce or 31'43 parts of silver to one of gold. It is most probable that the fall in price would be much more. Assume, however, that this last buttress of silver, the Bland Bill, goes, and the gold price of that metal becomes 30 pence per ounce. This means another fall in the gold value of silver of 32"66 per cent. It may be a matter of opinion how the pressure for the adjustment of prices would operate, whether by a further fall in gold prices generally or a rise in silver price in silver standard countries, but that an adjust- ment would take place cannot be doubted if the experience of the past is to be our guide. We have theorised that in the event of a decline in the gold price of silver, prices of commodities generally would experience a corresponding rise in silver standard countries. This theory may be false. Our fathers and grandfathers lived in the gold and silver fixed relation period, and their theories are based upon their sur- roundings. Their forefathers knew next to nothing about the subject. We are witnessing the tremendous might of gold and silver under a less constrained legislative relationship than existed 14 years ago, and we may possibly have to abandon some monetary theories and modify others. The difierence between the positions of gold standard countries such as Great Britain and silver standard countries is enormous. A gold standard country wherein barter has ceased to be practised, the monetary system of the first order affecting each unit of the whole population, wherein the quantity of the standard metal is sought to be maintained at a tolerably uniform level such as Great Britain possesses, cannot be com- pared with a silver standard country wherein barter most extensively prevails, where the monetary system, though of first class automatic order, affects only a minimum of the population, where the quantity of the standard metal as currency fluctuates with prosperous and unprosperous seasons, owing to the customs of the people and not to the condition of its external trade. • If prices generally in Great Britain fall equally and at the same time with the Jail in the gold price of silver — see Economist diagram of the prices of silver and commodities generally in the first report of the present Grold and Silver Commission— it is difficult to perceive how the current agricultural and pastoral interests are worse off than before the dislocation, provided there has been an equivalent fall in rents. N 2 100 KOYAL COMMISSION ON GOLD AND SILVJSR : App. VII. such as India.* Would it not be unnatural to suppose that changes in currency matters would be equally rapid in two such countries ? Surely the sensitiveness of the gold standard country must be vastly greater than that of such a silver standard country, t It would certainly appear to be a sounder theory, that given a fall in the gold price of silver in such a country, gold prices generally should fall there rather than silver prices should rise in such a silver standard country. 8. "With regard to the first cause assigned for the fall in prices generally in Great Britain since 1873. If the theory is sound and applicable to the whole worldj that owing to diminished supply and fresh distribution of gold for currency purposes, -an appreciation of this metal has taken place, and that in consequence gold prices generally have fallen 30 per cent. , then the pur- chasing power of gold instead of being as it was in 1873, 700,000,000?., is now for the whole world 921,000,0001 It might be asked whether this increase of purchasing power is only commensurate with the increase of inter- changes. If it is more it should have the effect of raising prices. But as we- have traced a decline of 26 per cent, to the dislocation between gold and silver, it appears only right to add this 30 per cent, fall which is due to another cause to that amount, and it becomes 56 per cent. ; a total fall which facts disprove. The result of the operation of that which appears to me to be the true cause, is the appreciation of gold. But it would not be true to attribute the alteration in prices to the appreciation of gold in the sense described under the first alleged cause. The true cause of the change in prices in Great Britain would be the decline in the gold price of silver, in other words the dislocation between gold and silver. 9. With regard to the second of the alleged causes of the decline of prices generally in Great Britain since 1873, viz., the diminished cost, or over production of commodities generally. It is stated to account for declining prices in Great Britain, that between two periods 1873 and 1887, the outlay of value giving factors necessary to produce a given weight or length of any- thing possessing exchange value has diminished to the extent of 30 per cent, in the 14 years. It would appear to be exceedingly difficult to estimate changes in a good many of the items which make up the value giving factors embodied in anything without using the measure of price. There is one, however, and that the chief factor, viz., labour, upon which manual labour saving machi- nery must have had a very considerable efl'ect, but whether it has had anything like an equivalent effect to the fall in the gold price of silver during the past 14 years I am quite unable to judge. I should be disposed to think it has not. But as this is a perfectly distinct cause to the dislocation between gold and silver, the 30 per cent, attributable to this must be added to the 26 per cent, due to the dislocation, which makes a general fall of 66 per cent, in British prices. Facts do not confirm this. Besides, if there have been economies * It is stated in Tooke on Prices that before the middle of tliis century it was estimated that India had absorbed 400,000,000^ of silver, and that the loss by abrasion, &c. on this equalled 4,000,0U0i. per annum. At the same time the French loss by abrasion on their silver circulation was estimated at 1,000,000^ per annum. Baboo Tin Coorey Doss, of Calcutta, who in the main has written very sensibly upon the present currency dilemma, estimates the silver circulation of India at 76,000,000!. Official documents of the United States of America place the circulation of that country at 200,000,OUOJ., but this is a calm doubling of the information received from their representative in Calcutta. t The difl'erence between the sensitiveness of the monetary systems of the two counti'ies may be compared in the one case to a well strung Eolian harp which responds to every breath of wind, whereas in the other case the harp is at best but ineffectively strung. t In one of the Nos. of the Fortnightly Review for 1872, Clifle Leslie gives his opinion that the value of money is a. local affair even in Prussia. 1 have not the material on whicii to form an opinion whether or not in this catastrophic period since 1873, gold has preserved a level of value in Great Britain, the United States of America, and Western Europe. The conditions of the monetary systems of Great Britain compared with the other countries alluded to, present some wide and pharacterislic differences. in the production, &c. of wheat in India,* have there not been corresponding economies in the production, &c. of Manchester shirtings ? 10. With regard to these last two reputed causes I feel no diffidence in asserting that if the gold price of silver should become 44 parts of silver to one of gold there must be a pressure to adjust prices generally to that relation, and that in all probability it would take the shape of a further decline of prices in gold standard countries. In that case I venture to affirm that there can neither be an appreciation of gold in the sense of the first cause, nor proportionate economies in the expenditure of value giving factors on the production of commodities, which will cause any one to question whether the fall in the gold price of silver was the true cause of the decline in gold prices generally in Great Britain. 11. Is there any remedy for debtors— States or indivi- duals — of deferred obligations. Some advocates of local dual standards insist upon the world or so many countries as they think may give permanence to the arrangement, endeavouring to carry out their theory on the proportion of 15J of silver to one of gold. Other advocates of the same system desire to engage the world or less to endeavour to carry out the fixed relation theory on the present relation. Many advocates of the system, admit the truth of the aphorism at foof}" and the possibility of the cheaper metal becoming the only standard, but add that such an event would not signify as the world does its business on paper, and that it should carry that about rather than metal. To all this the answer is that the additional knowledge gained during the past 14 years of the principles which must govern a sound monetary system based upon an eflTective metal standard, precludes the attempt. It is likely that, for a long time to come, whilst silver is finding its exchange value in nearer relation to its cost value, that general prices will be fallacious guides to values. We may hope that when the last vestage of protection is removed from silver, that in consequence of the fall in its gold price, production will be so curtailed as to save it from the very great fall which to some people, at present, appears inevitable. The genius who may devise some means, without an overt or covert attempt at a fixed relation between gold and silver, to relieve debtors from the additional burden which the break down of tlie monstrous delusion of bi- metallism has entailed, and without injuring the resi- dents of Great Britain and other countries which may be similarly situated, will earn a very prominent niche in the Walhalla of the nations of the world. * For centuries past there have been two currents of counteracting tendencies in India which have been very largely intensified since the introduction of railways into that country. One is the extension of the monetary system to vast numbers of the people, the tendency of which should be to reduce prices there. And the other the cheapened cost value of commodities, chiefly attributable to diminished cost of carriage and the rendering accessible to trade fresh tracts of country which would tend to raise prices there through the greater work the same amount of standard metal could perform. + " No two different substances can be exchanged for any length c f " time on parallel lines of quantities or values, neither can they be pro- ' duced for any length of time on parallel lines of cost." The con- clusion from this is that local dual standards are unnatural, unscientific, and unworkable. It has been pointed out more than once that if periods in.history recurred just now with regard to the comparative out- put of gold and silver and on the present comparative cost of the two metals within 40 years, there would not be any gold currency, it would have been driven out by silver even though all the world had embraced bi-metallism. As an instance of lamentable ignorance, even among educated people in official positions, where abetter understanding might be expected, the definition given of double standards or bi-metallism in the last valuable report issued by the Mint Master of the I United States of America • where Its standard silver coins are unlimited legal tender, the siime as Its gold coins. ' This is the distributive side of bi-metaUism. M ithout the receptive side as well which is that the metal must be received in unlimited quantities, there is no bi-metalhsm. As a fact it does not exist in the world at present. It is hardly a fair representation of the monetary position of the world to assert that silveris discredited because certain countries in Western Burope and North America have ceased their efforts to combine that metal with gold as their standards. Of tlie f ,030,000,000 people within thecomity of trading nations, whose interchanges as separate commu- nities among themselves are measured by a more or less effective metal .standard, 700.000,000 people most freely exchange any of their productions APPENDIX. 101 APPENDIX VIII. Apr. VIII. Tables sliowin"- tho Total Tkade of the United Kingdom ami Tkade with Silver-using Countries. -Value of Total Imports into the United King- dom in each of the last fifteen years, and in quin- quennial periods, showing also the per-oentage of increase or decrease : — 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 Total Thousands of £ - 371,287 1873 - 370,083 1874 - 373,940 1875 . 375,155 1876 - 394,420 1877 - 1,884,885 - 368.771 1878 - 362,992 1879 - 411,2,30 1880 - 397,022 1881 . 413,020 1882 Total - - 1,953,034 Per-centage increase (+) or decrease (— ) on "I a.-j-q previous quinquennial period - - J II. — Value of Total Exports from the United King- dom in each of the last fifteen years, and in quin- quennial periods, showing also the per-centage of increase or decrease : — Thousands ol £ - 311,005 - 297,650 - 281,612 - 256,777 - 252,346 Total - - 1,399,390 - 245,484 - 248,783 - 286,414 - 297,083 - 306,661 Total - - 1,384,425 Per-centage increase (4-) or decrease ( — ) on"l previous quinquennial period - - J 1883 1884 1885 1886 1887 426,892 1883 390,019 1884 370,968 1885 349,863 1886 362,228 1887 Total 1,899,970 Total - 305,437 - 295,968 - 271,404 - 268,667 - 280,763 - 1,422,239 Per-centage increase {+) or decrease ( — ) on\ _2-7 previous qviinquennial period - - J Per-centage increase (-|-) or decrease { — ) on \ previous quinquennial period - - J +2-3 III. — Impoets and Expoets together. Year. All Countries. Silver-using Countries. 1875 .-.--- 1874 . - - - 1875 1876 - 1877 Millions of £ 682 668 656 632 647 Millions of £ 93 94 98 94 102 Average . - . - 667 96 1878 1879 . - - - 1880 1881 - 1883 614 612 698 694 720 90 85 104 104 109 Average .... 667 98 Compared with previous period +l-B7o -H27o Year. All Countries. Silver-using Countries. 1883 1884 . - . . 1835 1886 .... 1887 Millions of £ 732 686 642 619 643 Millions of £ 110 104 99 98 99 Average - - - , - 664 102 Compared with previous period -0-5 +4% 102 ROTAI. COMMISSION ON GOLD AND SILVKE : App. VIII. IV. — Value of Total. Imports into the United Kingdom from the following Silver-using Countries. Year. India (British). China, including Hong Kona; and Macao. Straits Settlements. Japan. Ceylon. Mauritius. Mexico. Central America. Total. 1873 1874 1875 1876 1877 Thous. of£ 29,891 31,198 30,137 30,026 31,225 Thous. of£ 13,304 11,938 14,809 16,296 16,323 Thous. of£ 3,464 2,605 3,149 2,642 2,722 Thous. of£ 661 573 378 657 734 Thous. o££ 4,331 3,600 4,381 3,134 4,499 Thous. of£ 1,274 1,044 824 937 1,891 Thous. of£ 500 647 722 662 799 Thous. of£ 1,364 1,121 1,309 935 1,380 Thous. of£ 64,689 62,626 66,709 66,287 68,673 Total 152,476 71,669 14,682 2.91)3 19,945 5,970 3,230 6,109 276,884 1878 1870 1880 1881 1882 27,470 24,698 30,118 32,629 39,921 14,779 12.384 13,088 11,720 11,366 2,537 2,665 3,698 3,784 4,580 629 451 632 676 721 2,922 3,569 3,386 2,136 2,408 887 642 284 449 446 607 583 628 691 679 968 1,386 1,.339 1,197 1,646 50,699 46,278 63,073 63,182 61.567 Total 154,836 6S,337 17,164 3,009 14,421 2.708 -54-6 2,888 6,436 264,799 Per-centage in-^ crease ( + ) or decrease ( — ) on previous quin- quennial period. , +1-5 -11-6 -H7-7 f3-7 -27'7 -10-6 +6-4 -4-4 1883 1884 1885 1886 1887 38,883 34,448 31,883 32,130 30,529 11,313 11,196 9,588 9.614 8,116 4,643 4,612 4,442 4,373 4,783 663 662 493 666 490 2,173 2,367 2,389 2,084 2,268 415 357 307 310 166 729 701 725 691 4ff4 1,117 1,305 1,066 1,117 1,341 59,936 56,648 60,892 60,786 48,164 Total 167.873 4«,826 22,852 2,874 11,271 1,664 3,220 6,945 266,416 Per-ceutage in-" crease ( + ) or de- crease (— ) on • previous quin- quennial period. , +8-4 -21-3 +33-1 -4-5 -21-8 -42-6 +11-3 -7-6 +0-2 V. — Value of Total Exports from the United Kingdom to the following Silver-using Countries. Years. India (British). China, including Hong Kong and Macao. Straits Settlements. Japan. Ceylon. Mauritius. Mesico. Central America. Total. 1873 1874 - 1876 1876 - 1877 Thous. of £ 22,314 25,435 26,595 23,677 26,619 Thous. of£ 8,628 8,763 8,936 7,981 8,256 Thous. of£ 2,172 2,808 2,094 2,069 2,410 Thous. of£ 1,884 1,364 2,594 2,191 2,460 Thous. of£ 1,108 1^240 1,132 1.134 1,106 Thous. of£ 014 615 380 364 598 Thous. of£ 1,380 1,323 981 677 1,072 Thous. of£ 380 175 876 738 973 Thous. of£ 88,480 41,722 42,688 38,731 43,484 Total - 123,640 42,563 11,663 10,493 5,720 2,671 6,333 3,142 206,015 1878 1879 - 1880 1881 - 1882 24,659 22,715 32,028 81,063 30,582 6,991 8,268 9,483 10,034 8,036 1,883 2,183 2,4«0 2,744 2,496 2,906 2,998 3,813 3.152 2,408 851 827 1,037 849 771 432 :;i;7 8S6 482 647 860 766 1,283 1,685 1,968 768 749 681 967 771 39,348 38,872 61,171 60,966 47,667 Total - 141,037 43,811 11,765 16,277 4,335 2,214 6,551 3,9.3.1 227,924 Per - centa«e, in-'^ crease ( + ) o^ decrease (-),on J- previous c^uin- quennial period. J +14-1 + 0'6 +1-8 +45-6 -24-2 -13-9 + 22-8 +26-2 -I-11'2 1883 - 1884 1885 . ' 1886 1887 - 33,383 82,063 30,879 82,617 32,020 7,676 7,993 9,578 7,976 9,487 2,793 . 2,816 2,625 2,260 2,654 2,601 2,604 2,299 2,320 3,705 769 782 666 602 662 681 428 294 292 313 1.620 1,083 867 1,003 1,182 860 926 693 70S 1,015 60.173 48,693 47,701 ' 47,673 51,038 Total - 160,861 42,610 13,04« 13,529 3,371 1,908 5,756 4,196 246,278 Per - centaee, in-~| crease (-I-) or decrease (-),on >• previous quin- quennial period. J + 14'1 -0'5 •HO-9 -11-4 -22-2 -18-8 -12-2 +6'7 -1- 7-6 APPENDIX. 103 VI. — Impoets op Wheat into the United Kingdom from VII. — Bxpoets of Cotton Piece Goods from the United the under-mentioned Counteies. Kingdom to the under-mentioned Gounteies. (In thousands of Owts. — OOO's omitted.) (In Millions of Yards.) Hussia. Canada. United State?. British India. Aus- tralia. 1873 9,-,96 3.702 19,796 741 1,801 1874 6,726 3.812 23,090 1,074 907 1875 10,005 3,622 23,623 1,334 1,157 1876 8,781 2.423 19,323 3,287 2,606 1877 10,828 2,952 21,387 6,105 426 Total - 44,936 16,371 107,119 12,641 6,897 187 ... 9,021 2,U21 29,061 1,821 1,454 1879 8,006 4,782 36,042 887 2,248 1880 2,880 3,8S8 36,191 3,229 4,246 1881 4,047 2,876 36,083 7,835 2,969 1882 9,576 2,689 36,137 8,461 2,476 Total - 33,629 16.866 172,614 21,733 13,392 Per-centage increase") ( + ) or decrease (-) >■ on previous period - ) -25 + 1.76 +61 +73 +94 1883 13.S47 1,797 26,129 11,219 2,684 1884 5,402 1,767 22,641 7,981 6,091 1886 11,976 1,745 24,273 12,170 5,279 1886 3,721 3,081 24,649 11,024 739 1887 5,501 3,969 30,630 8,612 1,347 Total - 39,947 12,361 128,222 60,936 15,140 Per-oentaj?e increase" ( + )or decrease (-) ■ on previous period -) +19 -26 -26 +134 -13 Canada. TTnited States. Aus- tralasia. British India. 1873 - 40-7 109-5 46-4 990 1874 - 44-8 105-3 46-S 1,119 1875 - 46'1 80 ■ 46-4 1,116 1876 - 31-3 64-9 ■ 63-6 1,160 1877 - 39-6 61-2 66-6 1,305 Total- ■ 202-5 410-9 269-6 6,696 1878 - 36-6 45-9 74-3 1,189 1879 - 29-9 51-6 48-8 1,206 1880 - 36-6 77-9 66-6 1,670 1881 - 47-2 68-1 82-5 1,640 1882 - 61-8 73-9 101-9 1,522 Total 202 , 320-4 373-1 7,227 fer-centa^e increase { + ) ordecrease (— ) on previous period > -0-2 -22 +43-7 + 26-9 1883 • 54-1 62-6 86-8 1,653 1884 - 27-6 53-2 99-3 1,643 1886 - - ; 32-2 46-2 110-1 1,664 1886 - 31-7 46-S 96-3 2,119 1887 - 32-7 44-0 90-9 . 1,812 Total 178-3 251-3 482-9 8,891 Per-centage increase ( + ) or decrease ( — ) on previous period |-ll-7 -21-« +29-4 +23 104 App. IX. ROYAL COMMISSION ON GOLD AND SILVER APPENDIX IX. Statement showing the Imports and Exports of Gold and Silver Bullion and Specie, of British Silver; the Ciecolation of Notes payable to Bearer on demand; the Bullion held by the Bank Duty paid on Bills of Exchange ; and the Amounts cleared at the London Bankers' Amount of Gold coined. Net Imports or Exports of British Gold Coin. Amount coined plus Ex- Imports and Exports of Gold Bullion and Specie. Amount of Net Imports or Exports of British Silver Coin Amount coined plus Ex- Year. cess of Imports or minus Excess of Exports Silver coined. cess of . Imports or mmui Excess of Exports. Excess of Imports. Excess of Exports Imports. Exports Excess of Imports Excess of Exports Excess of Imports Excess of Exports. 1 2 3 4 6 6 7 8 9 10 11 12 13 £ £ £ £ Thsnd. £ Thsnd. £ Thsnd. £ Thsnd. £ £ £ £ £ 1855 9,008.663 — — — — 11,847 — — 195,510 — 1856 6,002,114 - - - - , 12,038 - - 46J,528 - - — 1867 4,859,860 - - - - 16,062 - - 373,230 - - — 1858 1,231 023 - 250,126 980,897 22,793 12,567 10,226 - 445,896 - 246,189 199,707 1859 Average 1865-69 1860 2,649,609 310,489 — 2,959,998 22,298 18,081 4,217 - 647,064 - 32,692 614,372 4,760,234 - - - • - 13,919 - - 424,846 - - - 3,121,709 — 3,103,629 18,080 12,585 16,642 _ 3,067 218,403 59,683 168,720 1861 8,190,170 - 8,089,174 100,996 12,164 11.238 936 - 209,484 — 114,024 95,460 1862 7,836,413 - 3,470,293 4,366,120 19,904 16.012 3,892 - 148,518 2,309 — 150,827 1863 6,607,466 - 4,760,627 1,856,829 19,143 15.303 3,840 - 161,172 53,191 — 214,363 1864 Average 1860-64 1866 9,635,597 — 4,308,287 6,227,310 16,901 13.280 3,621 - 636,194 - 62,125 48,3,069 7,058,269 - - . 2,313,867 16.189 14.295 - - 254,654 - - 220,488 2,367,614 — 1,181,417 1,186,197 14,486 8,493 6,993 601,732 14,909 616,641 1866 6,076,676 46,634 - 6,123,310 23,610 12,742 10.768 - 493,416 — 36,297 468,119 1867 496,397 813,767 - 1,310,164 16,800 7,889 7.911 - 193.842 — 18,087 176,756 1868 1,663,384 - 2,301,076 647-691J 17,136 12,708 4.428 - 301.366 — 69,037 242,319 1869 Average 186,5-69 1870 7,372,204 — 303,022 7,069,182 13,771 8,474 5,297 - 76,428 - 201,931 126,603} 263,466 3,393,256 - ~ 2,808,232 16,941 10,061 - - 313,365 - - 2,313,384 — 996,226 1,317,168 18.807 10,014 8,793 336,798 206,546 130,262 1871 9,919,656 - 4,844,412 6,076,244 21,619 20,698 921 - 701.614 — 143,229 668,285 1872 15,261,442 - 7,813,692 7,447,850 18,469 19,749 - 1,280 1.243,836 — 225,359 1,018,477 1873 3,384,668 - 3,074,773 309,795 20,611 19,071 1,540 - 674 — 196,003 885,671 1874 Average 1870-74 1875 1,461,565 — 1,797,490 336,926} 18,081 10,642 7.489 - 890,604 - 167,542 723,062 6,468,123 - - 2,762,824 19,617 16,036 - - 850,885 - - 663,149 243,264 — 294,979 61,715} 23.141 18,648 4.493 694,000 _ 18,014 675,986 1876 4,696,648 - 1,577,674 3,118,974 23.476 16,616 . 6,960 — 222,354 2,876 _ 226,230 1877 981,468 1,367,606 - 2,318,974 16,412 20,374 - 4,932 430,918 — 164.765 266,183 1878 2,265,069 3,021,119 - 5,286,188 20,871 14,969 6,902 — 613,998 — 32.955 581,043 1879 Average 1875-79 1880 36,060 — 2,697,451 2.662,401} 13.369 17,679 - 4,210 549,064 - 353.891 195,163 1,644,300 - - 1,608,004 19,260 17,617 - - 480,071 - - 368,721 4,160,062 — 1,005,499 3,144,553 9,465 11,820 .- — 2,374 761,503 _ 409,802 351,706 1881 — — 72,651 72,651} 9,963 15,499 - 6,536 997,128 — 830,118 667,010 1882 — 1,000,506 - 1,000,506 14,377 12,024 2,353 — 209,880 _ 622,865 312,985} 1883 1,403,713 27,472 '- 1,431,185 7,766 7,091 665 — 1.274.328 — 298,392 976,936 1884 Average 1880-84 1885 2,324,015 1,676,666 — 8,471,087 1,147,072} 10,744 12,013 - 1,269 668.648 - 205,769 462,789 - - 871,324 10,459 11,091 ~ - 780,278 - - 426,891 2,973,463 225,495 — 3,198,948 13.377 11,931 1,446 720,918 __ 267,344 463,674 1886 — — 893,868 893,869} 13.392 13,784 - 392 417,384 — 49,711 367,673 1887 1,908,686 2,050,178 3,961,864 9.956 9,324 631 " 861,498 — 176,692 684,906 • Alteration of duty, estimated to produce a loss of 160,000?. t Rate of duty increased. APPENDIX. APPENDIX IX. 105 Ai'i'. IX. Gold and Silver Coin, and the Amount of Gold and Silver Coined; the Average Price of Bar OP England, the Average Rate of Discount at the Banic op England ; the Amount op Stamp Clearing House, in the undermentioned Years. Imports and Expoi-ts of Silver Bullion and Specie. Avei-age Price in London of Bar Silver per Ounce. Average Annual Circula- tion m the United Kiuf^- dom of Promissory Notes payable to Bearer on Demand. Amount of Bullion in the Bank of England. Bank of England Discount. Rate of Net Produce of Stamp Duty on Bills of Ex- change.§ Amounts cleared at the London Bankers' Clearing House. Year. Imports. Exports. Excess of Imports. Excess of Exports. Highest m the Year. Lowest in the Year. Average for the Year. 14 1.5 16 17 IS 19 20 21 22 23 24 25 26 Thsnd. £ Thsnd. £ 6,981 Thsud. £ Thsnd. £ Pence. Millions £ 6It't 37'6 Thsnd. £ 1-1,180 Per cent. 6 Per cent. 34 Per cent. 4} Thsnd. £ 445* Millions £ 1855 - 13,813 — - Ul,"! ; 37.7 10,933 7 4J 3} 621 - 1856 - 18,505 — - 61} 87 -3 10,108 10 6i 6} .521 ~ 1857 6,700 7,062 - 362 OlA 37-1 17,848 6 2-i 31 446 - 1868 14,772 17,608 - 2,830 62rV 39-4 17,929 4i 21 2} 605 - 1859 Average 1865-59 1860 - 12,594 - - 61M 87-8 14,099 -■ - m 488 , - 10,391 9,893 501 _ 611-J 39-1 15,240 8 3 4i 571t _ 6,583 9,673 - 2,990 60-15 37-1 13,009 8 3 6i 550t - 1881 11,753 13,314 - 1,561 OlA' 37-2 10,343 3 2 2J 375 - 1862 10.888 11,241 - 353 m 36-8 14,560 8 3 45 664 - 1863 10,827 9,863 974 - 011 :i(;-8 1,3,488 9 6 n 769 - 1864 Average 1860-64 1865 10,089 10,775 - - 61^4 37-4 14,526 - - ^ 623 - 6,977 6,599 378 _ OItV 37-7 14,632 7 3 4} 768 — 10,777 S.897 1,880 - 61 ; 39-1 11,873 10 31 7 730 - 1866 8,031 6,436 . 1,586 - no a. 1 39-3 21 ,.339 3 2 2i 690 - 1867 . 7,716 7,512 204 - 60^ 40-3 20,787 3 Zi ov 693 - 1868 6,730 7,904 - 1,174 60^ 40- 18,811 « 2i SJ 720 3,626 1869 Average 1866-69 1370 8,044 7,469 - " co:-s 39-3 18.063 - - 3JJ 720 - 10,649 8,906 1,743 60A 40-2 20,775 6 21- s; 3,914 16,622 13,062 3,460 ~ 60J 42-2 23,588 5 2 03 764t 4,826 1871 11,139 10,587 .:53 - OOxV 13-4 22,585 7 3 4i- 846 5,916 1872 12,988 9,823 3,160 - 69i 43-2 22,700 9 3 4" 959 ,6,071 1873 13,298 12,212 86 - SS.'iT 13-7 22,294 6 2i 3} 985 6,937 1874 Average 1870-74 1875 12,719 10,919 - - 5!i;j 43'6 22,.'!SS - - m 888 6,333 10,124 8,980 1,141 — 56i 15-1 23,922 5 ■i 3i 903 5,686 13,678 12,948 630 - 62} •1(1 -1 28,696 6 3 2i 852 4,963 1876 21,711 19,437 2,274 - 611-5 15-8 2.5,.'i74 5 2 n 760 6,01.2 1877 11,552 11,718 - 166 o-i.% 45-3 2:!,933 6 2 3' 770 4.993 1878 10,7-17 11,006 - 219 511 43-9 32,520 4 2 21 723 4,886 1879 13,650 12,818 - - 53^ 45-3 26,892 - - 2.. 1 803 1 5,114 Average 1375-79 6,799 7,001 — 203 .52.1 -13 -1 27,912 3 2i 2} 711 5,794 1880 0,901 7,004 - 103 5i;; 41-9 24,579 5 2-^- 3-: 7111 6,357 1881 9,213 8,985 278 - ■51 ;■ 42-5 21,991 6 3 il 7oi; 6,321 1882 9,468 9,333 145 - 50i"i - 41-8 22,220 4 3 Sf, 1 758 5,929 1833 9,633 9,986 — 353 505- 40-5 22,955 5 3 oil) 745 5,799 1884 3,409 8,468 - - 51»5 41-7 23,931 - - «. 743 6,020 Average 1880-84 9,434 9,863 — 418 48^ .39-2 24,005 5 2 s 699 5,511 1886 7,472 7,224 2m - 451 38-9 21,015 ■i] 2 3 633 5,902 1886 7,819 7,807 12 44i 38'3 21,867 5 2 3i 641 6,077 1887 J The excess of exports in theae years was larger than the amount coined at the Mint. o 54648. § Years ending 31st March, o 106 ROTAL COMMISSION ON GOLD AND SILVER: APPENDIX X. MOVEIIENT OF G-OLD BULLION AND SPECIE BETWEEN THE UNITED KINGDOM i Year. Pkanoe, Geemant. Russia. Spaiit and Poe- TUeAL. GlEEALTAE, MaITA, TUEKET. Holland and Bel- gium. Excess of Excess of Excess of ^-« Excess of Excess of i 1 1 o & m 1 1 o o .1 I a 42 a 42 1 si «| " p. " ft if Hg, it wg, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IB 16 17 18 19 20 21 23 23 24 £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 1868 654 10,530 - 9,876 1,491 102 L389 - 1,448 - 1,448 - 143 187 44 99 654 - 555 133 212 - 80 1859 937 14,902 - 13,966 351 426 — 75 2,070 97 1,973 — 83 742 657 159 lis 46 — 28 606 — 478 1860 341 10,401 — 10,060 26 22 4 - 165 2 163 — 11 1,357 1,346 29 196 - 167 33 129 — 96 1861 2,504 998 1,606 - 364 16 349 - 657 - 557 - 16 985 969 65 103 - 48 522 6 617 — 1862 92 6,356 — 6,264 422 30 392 - 757 1,798 - 1,041 18 2,360 2,842 13 1,230 - 1,217 8 318 - 310 1863 188 3,503 - 3,316 186 1,081 - 895 , 905 2,708 - 1.803 7 1,693 1,686 109 273 - 164 130 23 107 — 1864 Totan 1860-64; Average 674 7,775 - 7,201 208 47 161 — 51 — 61 - 106 1,B88 1,482 42 100 — 68 12 34 — £2 3,699 29,033 - - 1,206 1,195 - - 2,435 4,508 - - 168 7,983 - 248 1,903 - - 705 509 - - 740 6,807 - - 241 239 - - 487 902 - - 32 1,597 - 49 880 - - 141 102 - - 1866 308 4,263 3,956 15 107 92 20 20 772 1,491 719 . 43 30 12 116 216 _ 101 1866 2.843 8,465 - 6,622 603 622 - 119 138 9 129 — 580 159 *42^ 164 6 158 - 267 451 - 184 1867 887 6,034 - 5,647 55 184 - 129 61 24 37 — 311 361 40 81 149 — 68 28 136 - 108 1868 280 7,190 - 6,910 42 1,094 - 1,052 - - — — 422 650 228 119 112 7 - 6 17 - 12 1869 Totan 1865-69; Average 696 4,614 4,194 - 3,498 26 19 6 - 3 - 3 - 12 64 52 228 240 - 12 3 19 - 17 30,146 - - 640 2,026 - - 223 S3 - - 2,097 2,715 - 631 537 - - 417 839 - - 903 6,029 - - 128 405 - - a 6 - - 419 643 - 127 107 - - 83 168 - - 1870 318 3,5'J5 _ 3,189 21 181 160 121 49 73 7 343 336 477 113 362 _ 434 3,333 2,899 1871 3,708 1,569 2,139 - 922 8,488 - 7,668 416 - 416 — 8 1,897 1,889 225 819 - 94 830 2,070 — 1,240 3872 2,117 1,040 1,077 - 464 8,162 - 7,698 38 33 6 — 16 1,672 1,656 148 380 - 231 319 408 — 89 1873 1,600 632 877 - 119 7,263 - 7,144 - 128 - 128 77 3,241 3,164 163 2 160 — 134 434 - 300 1874 Totan 1870-74; Average 740 5,434 - 4,694 85 132^ - 47 48 — 4S - 4 359 355 127 70 67 - 197 1,005 - 808 8,390 12,180 - - 1,601 2.J,216 _ - 622 208 - - 112 7,612 - 1.139 886 - - 1,914 7,260 - - 1,678 2,436 - - 320 4,813 - - 124 42 - - 23 1,602 - 228 177 - - .388 1 1,450 ; — - 1875 2,023 6,251 3,228 409 6,406 6,997 _ 6 1,198 1,193 245 71 174 330 2,209 1,879 1876 1,427 4,189 - 2,762 703 2,223 - 1,620 2,061 - 2,601 - 433 2,367 1,934 159 193 - S3 1,979 462 1,517 — 1877 873 6,148 - 5,276 430 8,313 7,913 - 1 - 1 459 743 284 59 363 — 194 696 61 685 — 1878 5,908 4,399 1,309 - 1,040 4,486 3,445 - 94 - 91 305 1,316 1,011 93 S27 - 234 978 839 139 — 1879 Totan 1875-79; Average 1880 2,905 696 2,209 — 91 2,924 — 2,883 — — - 476 853 883 150 83 87 - 763 612 150 - 13,136 20,883 - - 2,673 24,331 - - 2,661 96 - - 1,677 6,482 - 706 906 - - 4,646 4,183 - - 2,627 4,177 - - 535 4,876 - 532 19 - - 335 1,396 - 141 89 181 168 - - 929 837 - - 2,118 602 1,616 216 120 90 _ 80 998 968 79 810 92 718 1881 2,130 1,089 1,041 - 443 611 - 168 44 - 44 - 102 1,083 961 101 90 11 — J,l£8 1,119 1882 1,832 3,290 - 1,458 53 600 - 547 - - - - 094 1,047 353 106 40 66 — 1,315 266 1,069 ^- 1883 1,295 101 1,194 - 157 189 - 32 - - - - 536 1,463 917 59 IB 44 — 1,680 840 740 1884 Totan 1880-81; Average 1,951 9,326 20S 1,688 — 72 288 — 216 — — — — 388 1,505 1,177 29 28 1 - 1,123 1,473 - 850 B,34E - - 941 1,814 - - a - - - 1,760 6,126 - 384 341 - - 5,966 2,670 - - 1.86S 1,06£ - - 188 303 - - 9 - - - 360 1,226 - 77 68 - - 1,191 534 - 1885 1,787 llf 1,669 218 3,16( 2,942 _ 629 1,220 697 68 115 _ 37 1,076 613 664 1886 1,35C 1,18 169 - 39 634 i — , 595 - - - - 161 2,267 2,106 59 36 23 - 638 869 — 821 1887 1,921 2' i 1,897 28 2,62f i — 2,600 — — — — 45 930 885 175 45 130 — 675 49 626 1 ~ " * Excess of Imports. APPENDIX. 107 APPENDIX X. Ai'P. X. AND THE UNDERMENTIONED COTJNTKIES IN EACH YeAE PEOM 1858 TO 1887. AUSTKALIA. United States. South and Cknteal America (including Moxiro and West Indies). Egypt, India, and China. Webt Coast op Aeeica ANT) South Afeica (including Mauritius). All other DOUNTEJES. Year. i 'a a o •y. O CO 11 o a l-H o Excess of S 1 Excess of 1 A o P, M Excess of t a 1 p. Excess of i Hi i 1^ Excess of 4 if p. ^1 MS Ho p. 25 26 27 28 29 30 31 32 S3 34 35 30 37 38 39 40 41 42 43 44 45 46 47 48 £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ • £ £ £ £ £ £ 9,065 -■ 9,055 4,502 136 4.3(;7 3,848 430 3,418 - 1,231 131 1,100 — 122 172 - 60 68 12 46 — 1868 8,626 - S.U25 7,909 10 7,899 - 1,738 477 1,261 - 1G8 613 - 445 106 8 98 - 121 188 - 67 1869 G,719 30 6,689 3,918 1,724 2,194 — 1,180 392 788 — 12 1,302 — 1,290 109 61 58 — 42 38 4 — 1860 6,.531 - 6,331 38 7,298 - 7,260 1,600 197 1,403 - 16 796 - 780 87 133 - 46 72 707 — ■ 635 1861 6,705 - 6,705 9,731 37 9,694 - 1,901 1,617 284 - 11 1,920 - 1,909 109 - 109 - 137 346 — 209 1862 6,996 19 5,970 7,531 40 7,481 - 3,961 1,974 1,987 - 16 3,474 - 3,458 74 257 - 183 62 267 — 205 1863 2,657 — 2,U07 7,480 1S.5 7,295 - 5,421 1,110 4,311 — ■ 124 2,060 - 1.936 100 135 - 36 127 216 - 119 1864 (•Total U860-64 Average 28,407 49 - 2S,GS8 9,284 - - 14,063 5,290 - - 179 9,562 - - 479 576 - - 430 1,694 - - 6,681 10 - 6,738 1,857 - - 2,813 1,058 - - 36 1,910 - - 96 116 - - 86 319 - - 6,051 15 5,036 4,304 01 4,243 _ 2,784 1,483 1,301 . 778 580 198 161 19 142 _ 136 227 91 1865 C,S40 19 6,821 8,412 1,015 7,397 - 2,169 1,161 1,018 - 1,295 458 837 - 127 6 122 — 171 383 — 212 1866 .-.,801 10 6,791 6,020 64 4,962 - 3,42:! 427 2,996 - 306 242 64 - 161 71 90 - 158 106 — 38 1867 6,990 10 6,980 0,976 113 6,863 - 1,690 1,670 20 - 308 1.488 - 1,190 127 63 64 - 176 292 — 116 1868 7,803 32,675 20 7,873 1,829 1,050 779 - 2,830 795 2,035 — 64 1,537 - 1,473 102 41 68 - 86 491 - 405 1869 f Total 11865-69 Average 74 - 26,017 2,,"03 - - 12,896 6,526 - - 2,751 4,315 - - 678 202 - - 727 1,689 - - 6,51.5 15 - 5,309 461 - - 2,579 1,105 - - 561 863 - - 136 40 - - 115 318 - - 6,479 30 6,449 6,994 73 6,921 _ 1,924 856 1,063 1,534 1.159 375 _ 117 161 _ 44 386 209 176 1870 6,899 — 6,899 6,493 114 G,379 - 1,172 2,859 - 1,687 205 1,544 - 1.249 138 1,143 - 1,005 614 697 — 183 1871 5,983 — 6,983 8,287 — 8,2S7 - 821 2,417 - 1,626 106 1,158 - 1,062 109 1,391 - 1,282 71 3,067 — 2,996 1872 9,444 — 9,444 3,171 2,117 757 - 3,127 413 2,684 - 2,627 1,180 1,447 - 97 247 - 150 140 3.087 — 2.947 1873 6,721 - 6,721 4,509 9 4,600 _ 2,864 1,649 1,215 — 769 936 167 443 11 432 - 1,574 1,038 536 - 1874 fTotal 11870-74 Average. 35,626 30 - 29,457 2,613 - 9,908 8,264 - - 6,331 6,977 - 904 2,958 - - 2,684 8,098 - - 7,106 6 - 5,891 523 - - 1.982 1,651 - - 1,006 1,196 - - 181 691 - 537 1,620 - 6,641 21 6,620 8,258 677 7,681 1,044 1,624 20 959 143 816 361 361 2,265 1,160 1,115 1875 4,957 10 4,947 4,372 3,524 848 - 2,442 974 1,468 - 2,464 1,365 1,099 - 426 230 196 - 1,455 981 474 — 1876 6,656 6,656 2,062 1,168 894 - 1,173 610 663 - 1,487 2,005 - 618 188 485 - 297 1,462 645 817 — 1877 6,681 10 5,671 866 829 37 - 1,591 279 1,312 - 3,109 749 2,360 - 169 347 - 178 1,130 1,096 35 1878 3,186 - 3,185 388 6,949 — 6,361 1,376 715 661 — 2,669 2,180 489 — 147 1,730 — 1,683 1,221 851 370 - 1879 fTotal ? 1876-79 Average. 1880 27,119 41 - 15,04« 13,047 - 8,226 4,102 - - 10,688 6.442 - - 1,291 2,792 - - 7.533 4,723 - - 6,424 8 - 3,189 2,609 - - 1,645 820 - - 2,138 1,288 1,942 - - 268 668 - - 1.507 914 - - 3,612 10 3,602 65 5,512 5,457 853 1,460 _ ■ 607 17 1.926 374 374 _ 1,279 917 362 4,470 — 4,470 23 7,387 - 7,36-1 846 1,196 - 349 388 1,649 - 1,161 135 54fl — 4'. 3 153 1,967 — 1,814 1881 2,997 — 2,997 6,10) 92 6,008 - 739 640 99 - 200 2.266 - 1,960 186 6 179 - 60 3,797 — 3,737 1882 2,256 — 2,256 10 938 - 928 817 1,262 — 445 451 1,836 - 1,381 531 - 631 - 60 458 — 398 1883 709 920 930 3//» 5,072 2,184 2,888 — 874 1,170 — 296 146 3,030 — 2,884 289 100 189 - 92 992 - 900 1884 (•Total t 1880-84 Average. 14,044 - 11,260 16,113 - - 4,129 6,727 - - 1,301 10,612 - - 1,517 046 - - 1,614 8,131 - - 2,809 186 - 2,262 3,223 - - 826 1,146 - - 260 2,122 - - 303 129 ~ - 329 1,626 - - 3,737 3,737 909 209 610 2,352 1,925 427 1,658 4.297 2,639 776 _ 776 177 279 102 1885 .2,726 . 140 2,586 3,022 2,095 27 - 2,006 4,431 - 2,425 3,028 384 2,642 - 409 195 214 - 65 662 - 607 1586 321 50 271 37 1,701 — 1,724 2,978 1,889 1,089 — 3,347 898 2,449 — 379 716 - 336 50 334 - 284 1887 * Excess of Exports. O 2 108 KOYAL COMMISSION ON GOLD AND SILVER: App. XI, APPENDIX XI. Movements op Silver Bullion and Specie between the United Kingdom (In thousands of Year. 1 FliANCE. GERMAIfY. Holland and BELeiirlr. Spain and Poetugal. Im- ports. Ex- ports. Excess of . Im- Ex- ports. Excess of . Im- Ex- ports. Excess of . Im- Ex- ports. Excess of Im- ports. Ex- ports. ports. Im- ports. Ex- ports. ports. Im- ports. Ex- ports. ports. Im- ports. Ex- ports. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 1868 2,079 391 1,688 - 180 557 - 377 662 697 - 135 373 — 373 — 18li9 o,3i;ii 4S2 6,884 - 1,036 856 179 - 1,892 98 1,794 - 250 1 255 - 1860 .3,698 915 2,783 — 393 376 18 — .572 217 355 — 257 1 266 -^ 1 ISGl 690 1,053 - 363 80 , 319 - 239 444 636 - 92 149 3 14S 18li2 2,203 849 1,354 - 1,474 214 1,260 - 1,231 442 792 - 101 8 93 — 1863 1,257 1,268 - 1 686 382 301 - 1,376 409 967 - 61 5 56 — 1864 Total ■) '1860-64 i Average 1865 1,116 2.146 - 1,031 648 202 446 - 1,623 774 849 - 62 27 36 - 8,963 6,221 - - 3,281 1,492 - - 5,249 2„378 - - 630 44 - - 1,793 1,244 - - 656 298 - - 1,060 ■176 - - 126 9 - — 854 700 164 — 169 459 — 290 529 1,429 _ 900 61 4 67 1866 2,499 2,090 409 - 821 1,696 - 876 49 2,136 — 2,087 75 107 — 32 1867 1,001 2,190 - 1,189 162 1,111 - 949 32 2,233 — 2,201 57 6 61 — 1868 1,045 1,822 - 777 334 904 - 570 176 2.698 - 2,522 74 1 73 — 1869 Total ■) 1866-69 i '1,792 3,417 - 1,626 397 372 26 - 678 610 68 - 83 - 83 — 7,191 10,219 - - 1,883 4,542 - - 1,364 9,006 - - 349 118 - - Average 1870 .1,438 2,044 — - 377 908 ^ - 27.'5 1,801 - - 70 24 - — 1,212 B59 663 — 1 707 — 706 40 4,830 — 4,790 57 337 _ 280 1871 1,091 1,240 - 149 1,184 3,092 - 1,908 402 3,033 - 2,631 20 1,066 — 1,046 1872 923 871 62 - 1,212 1,246 - 34 1,305 526 77:i - 9 1,175 - 1,166 1873 1,342 3,664 - 2 223 425 280 145 - 102 1,199 - 1,097 13 484 - ■471 1874 Total ■> 1870-74 S Average 1876 1,172 1,322 - 160 2,362 117 2,236 - 419 847 ~ 428 18 1,895 - 1,877 6,740 7,566 - - 5,174 6,442 - - 2,268 10,435 - - 117 4.il37 - - 1,148 1,611 - - 1,035 1,088 - - 454 2,087 - - 23 991 - — 1,392 2,450 — 1,068 1,153 102 1,051 — 74 363 — 289 16 1,685 1,670 1876 1,841 1,833 - 492 6,364 191 5,173 - 174 401 - 227 G 203 — 197 1877 1,621 768 763 - 13,748 65 13,683 - 107 102 6 - 19 1,566 — 1,647 1S7S 1,741 2,191 - 450 3,999 1,474 2,525 - 100 171 - 71 42 729 — 687 1879 Total -( 1876-79 > Average 1880 2,347 723 1,624 - 784 1,723 - 939 49 148 - 99 246 279 — 33 8,342 7,066 - - 2.1,048 3,666 - - 504 1,186 - - 328 4,463 - - lj668 1,603 - - 6,009 407 711 - - nil 237 - - 66 892 — — 2,069 17.'; 1,896 — 4C7 — 00 21 200 — 269 30 12 18 1S81 1,469 704 765 - - 223 763 - 512 50 199 - 119 32 348 _ 316 1882 2,643 360 2,293 - 668 150 408 - 40 181 - 144 66 1,204 — 1,118 1883 2,070 189 1,881 - 290 284 6 - 47 107 - 60 10 1,206 _ 1.166 1884 Total 1 1880-84 j Average 18S5 1,728 633 1,096 - 363 15 848 - 70 42 28 — 78 467 — 389 9,969 2,049 - - 1,841 1,681 - - 228 822 - - 236 3,2;j7 - — 1,99 1 410 - - 368 336 - - 46 164 - - 47 &47 — — 1,723 1,491 234 — 417 39 378 — 108 120 _ 12 121 313 _ 192 1886 1,187 1,019 168 - 416 13 403 - 59 33 20 - 84 240 — 162 1817 1,242 475 767 ~ 012 148 464 121 26 96 — 120 203 — 83 APPENDIX. 109 APPENDIX XI. App. XI. AKD THE XINDERSIENTIONED COUNTRIES IN EACH YeAR FKOM 1858 TO 1887. £— OOO's omitted.) GiBEALTAE, MAI.TA, ASD TUKKET. UlflTED State - SOUTII AND CENTEAL AMEP.ICA (iiicludiug Mexico nnd West Indies). EoTrr. India, and China. Otheh Countki ES. , Year. Im- ports. Ex- ports. Excess of Im- ports. 2:j Im- ports. Ex- ports. Excess of Im- ports. Ex- ports. Excess of Im- ports. Im- ports. Ex- Excess Im- ports. E.1- ports. Excess of Im- ports. Ex- ports. ports. ports. Im- ports. Ex- ports. 18 19 21 22 23 31 33 1 26 1 37 28 20 3(1 31 33 33 34 35 £ £ £ £ £ £ f £ £ £ £ £ £ £ £ £ £ £ 80 3 77 309 67 212 - 2,986 219 3.707 1 5,039 5,088 129 40 89 - 1838 29 - 29 1,761. 4 1,700 - 3,335 137 3,253 8 16,003 1P,995 33 36 3 - 1859 ■ 40 — 40 873 3 872 4,323 201 4,324 2" 8,131 8,122 30 50 — 20 1860 43 — to 28 81 'o6 - 5,116 203 4,913 2 7,280 7,278 29 S6 - 07 1361 30 905 •*,-5 333 1 332 - 6,330 67 6,203 2 10,710 10,708 47 118 - 71 1862 30 — 30 627 It 013 - 6,750 115 6,635 2 8,818 8,816 99 240 - 141 1863 31 15 18 155 5 150 - 7,073 190 6,882 1 6,.308 6,307 120 181 - 64 1864 Total 1860-64 Average 1863 176 920 - 2,018 107 - - 29,793 778 - 9 41,240 - 323 694 - 35 184 — 404 31 - - 6,959 155 - 8,343 - 65 1.39 87 - 24 4,7 47 230 5 223 — 5,009 109 4,900 14 3,808 3,794 63 — 151 ■ — 161 1,833 - 1,833 - 4,470 136 4,341 757 2,53S 1,781 123 202 - 80 1866 116 _ 115 1,472 — 1,172 - 5,106 123 4,982 5 647 642 70 125 — 55 1867 37 40 17 1,916 - 1,916 - 3,429 87 3,342 647 1,793 1,146 39 167 - 128 1868 45 4 41 1,110 2 1,108 - 2,656 240 2,410 16 3,088 3,073 54 270 - 216 1869 Total 1865-69 Average 1870 415 44 - 6,561 7 - - 20,669 685 - 1,439 11,874 - 348 851 - - 83 9 — 1,312 1 - - 4,134 137 - 288 2,375 — 70 170 — - 60 1 30 3,337 22 3,363 — 3,760 IJ 3,717 1,367 3,143 778 766 263 603 — 51 4 47 5,689 1 3,688 - 3,403 73 3,.330 4,248 4,236 Hi: 432 317 115 - 1871 91 13 78 4,575 — .t.J73 - 2,819 101 2,719 78 0,186 6,108 126 470 - 344 1872 61 4 57 5,!I92 2 5,990 - 3,081 37 3,024 846 3,443 2,596 1,146 817 329 - 1873 62 — 02 3,477 23 3,433 — 3,996 56 3,940 412 7,015 6.603 391 936 - 545 1874 Total 1870-74 Average 1875 325 22 23,120 50 - 17,039 309 - 6,951 23,021 - 2,861 2,S03 - - 63 ,. 1 — 4,624 10 - - .3,403 03 32 - 1,390 4,605 - 672 661 - - 45 41 4 3,181 89 3,903 — 3,432 3,400 249 4,094 3,S15 5S5 123 463 — 43 e 37 2,637 378 2,269 - 3,143 49 3,094 2.58 .0.192 9,234 612 394 218 - 1870 34 16 18 2,616 298 2,318 - 3,3'J4 23 3,369 177 1G,'',73 16,103 93 326 - 131 1877 42 36 6 1,617 1,083 331 - 3,543 26 3,522 ISO 5,842' 6,6S2 281 167 114 - 1878 60 00 2,596 614 1,982 - 3,815 342 3,273 4P6 6,588 6,093 308 883 1,398 8 - 1879 Total 1875-70 Average 1880 224 99 - 12,lH7 2,462 - - 17,332 674 - 1,339 42,3SS - 1,969 - - 45 20 _ 2,329 493 - - 3,466 135 - 273 8,478 — 394 260 - - 413 46 1,199 34 1,165 — 2,583 96 2,1S7 228 5,465 6,237 217 5''3 — 306 51 2 49 2,598 31 2,507 - 2,168 217 1,011 162 4,370 4,218 178 337 - 169 1831 24 6 18 1,922 29 1,893 - 3,629 00 3,560 126 0,430 6,304 241 513 - 299 1?82 37 2 35 2,804 49 2,755 — 3,831 86 3,745 101 7,033 6,869 188 367 " 179 1833 38 38 2,629 8 2,621 - 4,408 64 4,344 133 8,346 8,221 190 412 — 216 1884 Total 1880-84 Average 1833 196 10 - 11,152 161 - - le,6l!9 362 - 795 31,644 - 1,023 2,182 - 39 2 — 2,230 30 - - 3,.323 112 - 139 6,329 - 205 436 - - 87 80 *i3 2,805 6 2,799 — 3,761 21 3,7 14 91 7,108 7,4117 366 285 80 — 18 33 *a 1876-77 1 8-508 37,440,031 Ol.OKJ.SOl 2.3,57.3,260 1,443,711 1,236,363 207,319 Nil. 9,!192, lOS. 2,793,536 7,108,872 6,271,122 12,695,798 11,641,651 1877-78 1 8-791 41,464,185 05,222,325, 23,758,143 1,578,327 1,110,798 40.S,1 29 13,030 13,770,.532 1,100,198 14,070,331 16,180,326 10,1.34,453 1.3,250,217 1878-79 1 7-794 37,800,595 fii),937,513: 23,136,918 1,463,050 2,359,223 '.Sg6,iys^ 85 3,6!IS,(KI9 1,623,005 3,070,691 7,210,770 13,948,565 13,190,608 1879-80 1 7-961 41,166,00:! 07,212,363| 26,046,360 2,050,393 299,889 1,760,504 14,730 0,003,002 1,735,259 7,809,713 10,236,967 15,261,810 12,798,303 Average \ of 5 years. } 1 8-531 39,361.731 i;2,4'.l5,.5ls' 23,113,707 1 1,674,492 1,059,601 014,988 9,320 -'<,8S0,396 1,832,197 7,054,199 8,493,880 12,,s,«G,048 1 2,446,075 1880-81 1 7 -f 56 63.11(1,770 74,380,602 21,1113,832 3,072,058 16,859 3,666,199 13,356 6,310,166 1,423,582 3,803.574 4,249,676 15,239,677 13,062,935 1881-82 1 7 ■ S!(5 49,113,374 81,968,461 32,866,077 4,856,392 12,408 t,S43,9Sl 33,970 6,466,389 1,087,339 6,379,050 2,186,276 18,412,429 13,504,624 1882-83 1 Tr,25 52,095,710 83,485,123 31,389,413 5,096,136 104,201 4030,871 17,495 8,358,022 877,795 7,480,227 6,508,458 15,120,521 16,180,711 1883-84 1 7-336 65,279,348 88,176,090j 22,896,742 3,409,407 6,962 6,462,505 Nil. 7,408,500 1,002,362 6,406,154 3,663,401 17,599,806 13,386,920 1884-85 1 7-3O8 66,703,072 83,255,292 27,532,2211 4,778,172 106,236 4,671,930 12,903 9,110,025 1,864,391 7,245,831 5,794,232 13,758,900 14,540,727 Average \ of 6 years, i 1 7 -Oil 53,061,655 82,293,111 29,231,457 4,774,243 61,344 4,712,899 15,557 7,331,819 1,231,092 6.080,727 4,480,408 16,026,268 13,935,184 1885-86 1 0-234 65,665,866 83,881,261 28,225,355 3,091,541 328,606 2,762,935 22,585 12,386,260 779,631 11,006,629 10,2S3,3(;7 10.202,692 1.1,710,203 l^sO-87 1 5-411 61,777,351 88,170,117, 26,692,766 2,83.3,668 656,493 2,177,065 Nil. 8,219,761 1,064,023 7,165,738 4,010,330 12.136,279 14,201,095 * Down to 1803-66 ihe year ended on the 30th April -, from 1866-67 inclusive on the 31st of March ; the figures for 1866-67 are, therefore, for 11 months onlv. t Net Export. APPENDIX. 113 APPENDIX XIV. ^^^- ^^'^• STATISTICS OF PRICES AND WAGES IN" INDIA. No. of Table. Page I. Prices in Calcutta of certain staple articles of import and export from 1843 to 1858 - - 114 I. (a.) Similar table from 1859 to 1872 - - - - - - - - 118 I. (b.) Similar table from 1873 to 1886 ......-- 122 II. Variations in tbe prices in Calcutta of the articles mentioned in Table No. I. (b) from 1873 to 1886, the prices of March 1873 being taken as 100 - - - - - 124 III. Average prices in Calcutta and London of Wheat, Cotton, Linseed, Silk, Tea, ludigo, Jute, Eice, Rapeseed, and prices of B.'ir Silver in London - . - - . 128 IV. Prices in Bombay of Cotton, Cotton Yarn, Cotton Cloth, Wheat, Linseed, and Wool, from 1873 to 1886 ..--.--..- 129 V. Rupee outturn of Wheat exported from India at the prices and exchange of the day from 1876 to 1886 - ......... 130 VI. Prices of food-grains (Rice, Wheat, Barley, Jowar, Bajra, Ragi, and Gram) in 17 selected stations in the provinces of India from 1861 to 1872 (12 years) and from 1873 to 1885 (13 years) ..-------.. 131 VII. Average wage of agricultural labour and of skilled labour at the same stations in India from 1873 to 1885 .......... 132 VIII. Eates of monthly wage of labour at certain stations on the East Indian railway - - 1 35 IX. Eates of wages in the Muir Mills, Cawnpore - . - . . . - 136 X. Average wages in the Manockjee Petit Mills, Tardeo ..... 137 XI. Monthly wages of Miners and Blacksmiths at the Collieries of the Coal Co., Limited - 138 o ,54648. 114 ROYAL COMMISSION ON GOLD AND SILVER: App. XIV. No. I. — Prices in Calcutta of oeetain Staple Commodities 1843. 1844. 1845. January. July. January. July. January. July. IMPORTS. ES. A. P. KS. A. P. KS. A. P. RS. A. p. RS. A. p. RS. A. P. f 5 4 5 8 5 4 8 , 4 10 Shirtings - Per Piece - to to to to . to L r 7 4 7 12 6 8 6 8 7 MtTLE Twist, No. 40 - Per Morah - 1 to 4 5 1 4 I 4 3 4 1 4 3 4 11 TuKKET Ket), Nos. 40 to 80 Per lb. : to 1 7 9 ■ 1 7 1 7 6 1 9 1 9 Oeangb Dye, Nos. 40 to 60 ;» S to 12 r ^ ° 1 1 13 14 Copper : Sheating, 32 ozs. PerFy.Md. 36 4 35 9 34 10 34 4 35 4 „ Braziers ... f> 36 4 35 14 35 14 34 6 35 5 Ikon : Square, flat and bolt }> 2 5 2 3 2 10 2 2 3 2 „ Square . . - - J} — — — — — „ Flat . . . - if — — — — „ Bolt ... - J) — — — — — Speltek . - - - - J? — 14 11 14 8 11 10 11 10 14 EXPORTS. 26 Hides : Buffalo - - - - Per Gorge : to 45 31 •53 56 56 55 „ Cow, salted ... 99 to 38-0 ■34 46 47 45 Indigo : Fine, good, red, violet - PerFy.Md. 170 120 120 145 145 „ Good and middling 3f — 150 105 105 135 a 135 „ Ordinary . _ . „ — 130 85 85 125 „ Fine, consuming ■ J) — — — — — — Jdte : Serajgung - - _ - Per Bale — — U 10 9 4 8 10 Lac Dte : D. T. Mark - Per B. Md. — 50 60 63 65 80 » B. j> - - - f> — 35 45 60 54 65 C. & E. „ - 39 — 20 0, 20 24 24 35 Lac Shell : D. C. Mark i> — 15 15 14 15 15 » B. „ - - „ — 13 12 12 15 8 16 16 G.N.C. „ >i — 12 8 11 11 8 9 4 10 12 Saltpetke : Gudna - - . PerFy.Md. 6 4 6 10 7 7 6 12 „ Chupra 99 — 5 14 6 2 6 4 6 6 5 15 „ Ghazeepore - - . 99 — 6 6 4 6 5 6 10 6 4 „ Tirhoot ... 99 — 5 12 6 8 6 10 6 10 6 5 „ Refraction, 2 to 3 per cent. - , 4to6 „ 7 to 10 „ — - — — — — — SuGAE : Benares, 1st quality Per B. Md. 11 12 12 4 11 4 11 12 12 8 „ Date, Ist quality - - - 99 — — _ 110 „ Bhaga - . - . 9> — 10 10 10 10 10 9 12 10 8 Silk, Raw : Cossimbazar Per Fy. Seer 10 11 10 6 12 6 11 10 „ Gonatea - . - »» — 9 11 9 11 4 10 8 10 „ Jungeypore 99 — 11 10 12 12 11 5 10 10 „ Hurrypaul - - - 9> — 10 3 9 10 11 4 10 6 10 „ Radanagore )J — 8 11 9 4 10 13 9 10 9 6 Linseed ---..- Per B. Md. — 2 5 2 1 15 2 2 5 Rice : Ballam .... Per Md. 1 6 9 1 8 1 7 1 10 1 12 „ Moonghy . - . . 99 1 9 1 7 1 7 6 1 9 1 12 Exchange on England, Document Bills Per Be. — s. d. 2 OJ s. 2 d. Of 1 1 d. s. d. 1 lOj s. d. 1 llf APPENDIX, 115 FEOM 1843 TO 1858, compiled fpom the Exchange Peice Current. App. XIV. 1846. 1847. 1848. 1849. 1850. January. July. January. July. January. July. January. July. January. July. KS. A. p. RS. A. p. RS. A. p. KS. A. p. RS. A. p. RS. A. P. KS. A. P. RS. A. P. KS. A. p. KS. A. p. 4 10 to 6 12 4 8 to 6 4 4 to 6 8 4 8 to 7 4 4 10 to 7 8 4 6 to 7 4 4 8 to 7 8 3 15 to 7 3 11 to 7 4 3 12 to 7 4 5 4 4 4 4 4 3| 4 3 4 3 4 6 4 3 4 2 4 4 19 6 1 6 1 5 6 1 5 1 4 1 5 1 4 1 3 6 1 4 1 6 6 14 13 13 14 14 14 14 6 14 6 14 6 15 35 6 35 14 33 6 33 4 37 12 37 12 37 7 37 12 42 8 39 8 39 4 39 • 38 13 38 8 40 10 40 4 35 12 35 34 4 33 8 8 8 2 11 3 2 3 10 3 12 3 4 3 2 2 12 2 13 3 8 2 15 3 2 11 2 8 2 7 U 5 11 2 8 8 9 4 10 5 10 10 9 7 7 8 8 10 7 5 6 15 52 47 46 46 40 40 38 40 41 42 45 37 38 38 35 35 35 36 31 40 140 130 125 110 136 122 130 116 120 105 115 100 115 100 120 105 125 110 — — — — — — — — — — — ■ 9 12 10 11 4 10 12 12 4 10 11 8 10 8 11 4 11 4 80 65 33 65 53 33 60 50 23 75 55 30 75 55 30 70 55 30 65 50 30 65 52 30 70 53 32 75 60 38 13 12 14 12 11 8 13 14 11 8 13 14 11 8 12 8 13 11 4 12 8 12 12 11 4 11 8 12 10 4 11 8 11 10 4 11 4 10 6 10 11 8 10 8 10 4 13 11 8 10 6 6 14 6 4 6 9 6 10 6 6 5 13 6 6 6 9 5 14 6 6 6 4 5 11 5 12 . 5 14 6 4 5 10 5 12 5 14 7 4 6 8 6 8 6 8 6 5 5 10 5 12 5 14 6 12 6 2 6 2 6 6 13 6 5 6 4 7 6 14 6 4 6 2 6 8 13 6 11 12 12 10 9 8 6 10 4 10 9 8 10 9 12 9 12 8 9 5 7 8 8 8 12 5 12 7 4 8 4 5 12 6 4 9 3 7 6 7 6 8 10 8 6 7 15 6 4 7 8 10 12 10 11 4 10 9 8 9 4 8 12 9 12 9 6 8 5 8 8 7 12 8 6 7 12 9 7 14 8 6 7 12 8 6 7 10 8 7 6 8 10 7 4 8 4 7 8 8 2 7 4 7 15 7 4 8 4 7 6 7 8 8 6 7 4 8 9 8 4 8 14 8 14 7 13 10 14 9 8 10 9 8 8 5 2 9 2 4 2 3 2 2 2 1 . 2 4 2 3 2 4 3 1 2 4 1 15 2 2 1 11 1 11 6 1 10 1 12 1 9 1 9 1 3 1 2 1 4 1 4 1 9 1 3 1 1 10 1 3 1 2 1 4 13 s. d. 2 14 s. d. 2 3 s. d. 2 OA s. d. 2 s. d. 1 114 s. d. 1 9| s. d. 1 lOi s. d. 1 101 s. d. 1 llf s. d. 2 04 P 2 116 Arr. XIV. KOYAL COMMISSION ON GOLD AND SILVER: No. I. — Prices in Calcutta of certain staple commodities IMPORTS. Shirtings Mule Twist, No. 40 Tdkkey Red, Nos. 40 to 80 Okange Dye, Nos. 40 to 60 CoppEii : Sheathing, 32 ozs. „ Braziers Ikon : Square, flat and bolt „ Square Flat Bolt Spelter 1851. January. July. Per Piece Per Morab Per lb. PerFy.Md. EXPORTS. Hides : Bufialo - „ Cow, salted Indigo : Fine, good, red, violet „ Good and middling „ Ordinary „ Fine, consuming KS. A. P. rs 10 < to [7 10 4 7 1 8 14 32 32 7 31 12 30 8 31 4 Per Gorge Jute : Serajgung Lac Dye : D. T. Mark G. &E. „ Lac Shell : D. G. Mark „ B. „ G. N. G. „ Saltpetke : Gudna Chupra Ghazeepore - Tirhoot Refraction, 2 to 3 per cent. „ 4 to 6 „ „ 7 to 10 „ 2 2 6 9 42 40 PerFj-.Md. 164 154 Per Bale Per B. Md, Per Fy. Md, 3 12 to 8 4 7 1 9 14 32 4 1852. January. July. 1853. January. July. KS. A. P. 2 12 to 7 4 1 1 2 13 29 10 KS. A P. 2 14 to 7 8 4 12 12 KS. A. p. 3 4 to 9 4 5 1 4 6 14 2 4 6 5 43 40 1 13 5 9 40 38 8 Sugar : Benares, 1st quality „ Date, 1st quality „ Bhaga - Silk, Raw : Gossimbazar „ Gonatea „ Jungeypore „ Hurrypaul - J, Radanagore Linseed - . . Rice : Ballam „ Moonghy - Exchange on England, Document Bills Per B. Md PerFy.Seer Per B. Md. Per Md. s. d. Per Re. - 2 2J — 11 12 75 60 37 12 8 11 8 10 12 6 15 6 6 6 4 6 12 9 8 10 164 105 152 118 32 12 31 4 2 10 5 13 41 37 8 KS. A. P. 3 4 to 8 4 2 1 6 13 6 38 14 40 8 40 14 41 4 69 58 35 12 8 11 8 10 4 6 14 6 2 6 2 6 14 9 8 2 8 9 11 12 10 14 12 8 10 10 9 2 4 17 1 4 6 105 85 (J 9 12 67 50 35 12 4 11 10 2 7 1 6 1 6 2 6 12 2 14 2 41 39 140 175 115 145 95 135 125 155 12 3 11 14 12 4 10 15 9 12 2 5 19 1 6 s. d. 2 Oi 7 12 6 4 7 10 9 15 9 10 9 14 9 6 8 4 1 8 I 11 1 9 s. d. 2 2i 9 15 75 63 40 12 8 11 9 10 7 2 6 2 6 4 6 14 7 4 5 12 7 4 12 9 10 9 8 2 9 1 10 8 1 8 s. d. 2 U 12 8 72 63 45 12 8 114 9 12 7 2 6 4 5 2 6 12 8 5 8 12 9 8 10 8 8 10 2 12 1 8 6 1 5 6 3 6 9 5 42 39 165 150 139 104 16 8 s. d. 2 li GOVERT^MENT OF INDIA, "I Depaetment of Finance and Commerck. j 67 60 45 12 4 11 10 7 2 6 3 5 14 6 10 9 4 6 14 8 5 13 12 10 9 11 4 9 6 2 10 1 10 1 7 6 s. d 2 1 I 4 ArrftjSDix. from 1843 to 1858, compiled from the Exchange Price C\irient"~continued. 117 App. XIV. 1854. January. July. 1855. 1856. January. July. .Tamuiry. July. 1857. January. July. 1838. January. July. KS. A. P. ,■5 8 to 7 12 4 4 16 6 13 45 8 45 2 3 12 11 8 43 39 8 15 12 72 60 45 13 4 12 10 12 7 4 6 10 6 2 8 12 8 4 14 11 11 6 10 2 13 1 12 19 6 d. RS. A. P. 3 4 to 8 2 4 4 16 3 13 49 14 46 8 4 14 12 8 47 42 175 138 125 158 21 70 64 43 12 11 10 10 13 9 6 8 11 8 10 7 6 6 8 13 4 8 14 9 8 3 2 1 10 18 6 s. d. 2 KS. A. P. 2 10 to 7 14 4 4 1 6 9 11 9 55 52 4 11 2 56 46 14 8 65 65 12 8 7 1 7 6 4 6 10 12 4 8 4 8 8 7 4 3 6 1 11 1 8 s. d. 2 2 7 to 7 M 4 3 16 3 11 6 65 52 4 7 12 4 57 40 17") 130 125 160 12 8 62 8 59 12 11 6 9 8 7 6 10 6 2 7 5 8 6 12 12 8 12 6 12 3 6 1 13 1 11 s. d. 2 If lis. A. P. 2 8 to 8 4 1 6 11 9 53 8 52 4 10 12 12 65 43 186 162 147 174 13 63 13 12 12 9 12 8 2 7 6 6 10 9 4 12 7 8 8 12 6 12 4 14 I 11 1 13 s. d. 2 22 KS. A. P. 2 13 to 8 8 4 3 1 6 3 11 9 48 49 3 10 12 10 80 45 180 160 145 165 12 12 66 63 14 8 14 12 8 8 7 8 6 12 8 10 7 12 14 8 10 6 11 12 3 5 1 12 1 11 d. US. A. r. 3 2 to 8 4 4 16 12 48 49 8 4 3 13 87 47 8 216 180 158 196 17 8 69 63 17 17 13 KS. A. P. 3 4 to 8 5 ] 6 12 6 44 8 46 8 3 10 13 120 60 8 12 8 4 7 10 10 8 16 15 4 2 1 12 1 13 6 21 67 8 18 18 10 10 10 2 8 14 14 4 U 10 24 22 4 2 2 2 KS. A. P. 3 8 to 9 6 3 16 14 43 8 50 8 3 14 13 14 8 12 8 4 7 8 14 s. d. 2 2* s. d. 2 2i 3 8 2 2 1 ES. A. P. 3 8 to 7 8 5 1 7 12 3 42 46 6 3 6 12 12 85 17 23 9 12 9 10 8 8 10 12 7 12 4 2 2 6 2 6 s. d. 2 1 J, E. O'CONOE, Assistant Secretary. 118 ROTAI/ COMMISSION ON GOLD AND SILVER : App. XIV. No. I. (a). — Pbices in Calcutta of certain Staple Commodities from 1859 to 187^, 1859. I860. 1861. January. July. January. 1 Jul}-. January. July. IMPORTS. RS. A. P. RS. A. P. RS. A. P. RS . A. p. ES. A. p. RS. A. P. Gkbt Shirting-s : Sj lbs. Per Piece 6 12 6 6 6 4 6 5 8 5 12 Mule Twist : White, good, No. 40 Per Morah 5 9 5 10 5 3 5 4 4 11 5 3| „ TurkeyE.ea,No.4e— 12lbs. Per lb. - I 8 I 12 I 9 1 9 6 I 8 6 1 10 „ Orange, Nos. 40 to 60 » 13 6 13 6 14 6 14 6 14 6 14 Copper: Sheathing - - - PerFy.Md. 41 4 42 4 44 8 44 4 41 4 41 12 „ Braziers - - - » 44 42 45 44 8 41 40 8 „ Australian - - - J> 54 49 8 45 4 42 42 40 12 Iron : Flat, bolt, bar, and square ') 3 12 3 12 3 4 3 1 3 8 3 3 Spelter : Hard - - . - )? 12 12 11 12 10 9 14 8 8 8 EXPORTS. Hides : Buffalo, slaughtered, Patna Per Gorge 110 100 no 95 100 90 „ Cow, slaughtered if 55 56 56 55 46 46 Indiso : Good - - _ - PerFy.Md. 237 8 237 8 245 Nominal. 240 Nominal. „ Middling ... » 227 8 227 8 205 )» 225 SJ „ Fine consuming ») 205 205 200 j» 215 J» „ Ordinary ... )J 160 190 155 „ 170 150 Jute : Picked .... Per Bale - 17 17 16 8 17 8 16 16 „ Ordinary - - . - 5* 13 8 15 13 13 8 12 8 14 Lac Dye : Fine . - . - PerB.Md. 67 8 70 75 77 8 65 69 „ Middling ... " 55 52 8 57 8 57 50 52 Shell Lac : Fine orange » 26 27 42 8 55 65 45 „ Middling ... JJ 24 25 40 48 56 42 Linseed : Fine, bold, clean )> 4 2 3 11 3 8 3 6 3 10 3 10 „ Middling >i 3 12 3 6 3 4 3 3 6 3 6 Rice : Moonghy .... ,> — — 2 12 — I 14 — „ Ballam - - . . Jt 2 12 2 7 2 10 2 9 I 10 I 14 Saltpetre : 2-4 per cent, refraction PerFy.Md. 10 8 11 2 10 8 10 8 9 4 7 8 „ 5 to 6 per cent, refraction - „ 9 4 11 10 4 10 6 9 7 6 Silk, Raw: Cossimbazar Per Py.Seer 16 8 17 4 20 4 20 18 17 8 „ Gonatea ... >y 16 8 17 20 — — „ Jungypore - - - i> 14 8 13 19 19 15 12 16 4 „ Hurrlpaul - - - }> — — 19 — — ^_ „ Radanagore )> 16 8 17 16 20 18 _ „ Surdahs „ — — _ Sugar: Benares .... Per B. Md. 11 6 10 2 10 12 — II 9 4 Sugar, Date: Gurpatta. »j — — — _ „ DuUoah ... » -- 7 12 9 7 8 8 4 7 s. d. s. d. s. d. «. d. s. d. s. d. Exchange on England, Dociunents Bills - Per Ee. - 2 H 2 Of 2 li 2 0| 2 If 2 1 APPENDIX. COMPILED FKOM THE "CALCUTTA PeICE CuRKENT " OW THE BeNGAL CHAMBER OF COMMERCE. 119 App. XIV. 1862. 1863. 1864. 1865. 1866. January. July. January. July. .January. July. January. July. January. July. RS. A. p. BS. A. r. KS. A. P. KS. A. P. ES. A. P. KS. A. P. RS. A. P. KS. A. P. RS. A. P. KS. A. P. 6 2 6 5 7 10 9 14 11 2 13 14 12 12 9 10 8 12 5 9 6 6 9 12 6 14 13 13 9 11 6 9 1 9 1 9 1 15 1 14 2 8 2 8 2 7 6 2 4 2 9 2 14 6 1 1 1 3 3 1 9 2 1 1 13 3 1 12 6 2 4 1 5 G 1 3 41 40 4 40 4 40 40 42 6 38 4 34 8 36 4 34 8 39 12 39 39 8 39 8 40 4 43 8 36 8 34 10 36 8 34 12 41 4 39 12 39 13 37 35 4 42 4 36 12 34 35 8 34 4 2 14 2 10 2 11 2 9 2 13 3 2 9 2 14 3 6 3 6 8 3 8 8 3 7 12 7 8 8 4 7 6 8 7 10 8 3 85 85 85 90 90 95 Nominal. 75 90 72' 51 46 46 48 — 53 46 45 48 42 295 Nominal. 260 260 210 Nominal. 240 Nominal. 245 — 275 ji 240 240 200 » 220 „ 230 — 275 »> 245 240 195 » 320 » 235 — 215 fi 210 200 155 »» 175 j> 185 — 14 8 16 12 19 8 24 25 26 19 19 26 21 11 13 4 17 21 22 21 16 14 19 21 70 63 63 65 65 63 8 60 60 68 65 45 88 43 30 48 45 47 47 56 54 49 51 8 56 51 51 8 45 Nominal. 28 33 24 45 48 52 44 49 43 36 22 29 21 3 11 3 14 3 12 4 6 3 14 4 7 4 4 3 5 2 4 9 6 3 8 3 11 3 10 4 2 3 9 4 2 3 12 3 14 4 12 4 8 1 12 1 12 6 1 12 1 11 6 1 7 1 9 1 11 6 1 12 1 14 6 1 13 3 9 2 12 2 10 2 14 3 1 3 Famine. 5 7 12 • 8 8 8 8 8 12 7 12 8 7 6 6 6 6 8 6 6 7 8 8 4 8 4 8 8 7 8 7 12 7 2 6 6 3 5 14 — 17 8 — 17 8 16 16 8 18 24 25 21 — 19 4 — — 17 17 19 26 25 8 22 8 15 17 — 17 14 15 15 8 23 8 21 18 — 13 12 8 15 12 — — - — — — 15 18 8 18 8 18 16 16 8 13 8 25 24 20 — 19 4 — 19 ' 17 16 8 19 26 36 22 11 — 12 0. 10 6 10 8 10 8 11 10 8 12 11 12 — 8 3 — — 8 13 — — — 9 — 8 4 — 6 6 7 4 8 8 -^ — — 7 4 s. d. «. d. s. d. s. d. s. d. s. d. *. d. s. d. s. d. s. d. 2 Oj 2 0^ 2 Of 2 OiJ 2 3 2 1 2 14 2 Of 2 If 2 li 120 A.PP. XIV. ROYAL COMMISSION ON GOLD AND SILVER : No. I. (a). — Prices in Calcutta of certain staple commodities from 1859 to 1872, 1867. 1868. January. July. January. July. IMPORTS. - KS. -A. p. KS. A. p. ES. A. p. ES. A. p. Gket SmuriNGs: 8 J lbs. - - - - Per Piece - 8 8 7 10 6 12 6 7 Mule Twist : White, good, No. 40 - PerMorah- 8 3 8 5 7 6 4 Turkey Bed, No. 40—12 lbs. - Per lb. 1 15 1 14 1 9 1 12 „ Orange, Nos. 40 to 60 >j 1 3 1 1 15 1 I Coppek: Sheathing - - - - - Per Fy. Md. 37 34 33 8 32 8 „ Braziers ..---- » 38 34 33 4 83 „ Australian . - - - - jj 35 34 4 34 8 31 4 Ieon : Flat, bolt, bar, and square - - - ., 3 10 3 10 3 4 2 11 Speltek : Hard . . - - - 3» 15 13 12 H 12 9 EXPORTS. Hides: Buffalo, slaughtered, Patna - Per Gorge - 75 80 81 88 „ Cow, slaughtered - - - - )) 39 39 44 44 Indigo: Good . . . - - Per Fy. Md. 237 8 — 260 — „ • Middling - - . - - )) 225 — 242 8 — „ Pine, consuming - . . - " 225 ~ 245 — „ Ordinary - - - . - J> 160 — 195 — Jute : Picked - . - - - Per Bale - 19 8 20 16 12 19 4 „ Ordinary . - - - - 3> 18 12 20 16 8 19 Lac Dye : Fine . . . - - B. Md. - 68 71 77 8 85 „ Middling - - - - - >t 60 61 62 8 70 Shell Lac : Pine Orange - - - - 'J 26 24 8 26 8 28 „ Middling . . . - " 24 22 8 24 8 25 Linseed : Fine, bold, clean - - - - .. 4 12 4 10 4 8 4 10 „ Middling - - - - - 5) 4 4 4 6 4 4 4 7 Rice : Moonghy . . . - . » 3 — 1 15 — „ Ballam . . - - - yy 3 2 2 8 2 2 3 Saltpetre : 2 to 4 per cent, refraction Fy. Md. - 5 4 5 6 5 2 5 10 „ 5 to 6 per cent, refraction iJ 5 5 5 ,5 8 Silk, Raw : Cossimbazar - . - - Per Fy. Seer 24 8 23 8 23 27 „ Gonatea .... )> 24 8 25 4 23 27 8 „ Jungypore .... » 22 22 8 21 26 8 „ Hurripaul .... " — — — — „ Radanagore - - . - i> 24 8 25 8 23 26 8 „ Surdahs .... i> 25 4 26 25 28 Sugar : Benares ..... Per B. Md. 12 8 11 12 11 4 SuGAK, Date : Gurpatta . - - . )» — 7 7 7 12 „ DuUoah . . . - )j — 6 12 6 12 7 s. d. s. d. «. d. s. d. Exchange on England, Document BiUs Per Re. - 2 oi 1 11|^ 1 11 ^ 1 11| GOVERNMENT OF INDIA, "1 Department of Finance and Commerce. / : APPENDIX. COMPILED FROM THE " CalcDTTA PeiCE CuREENT " OF THE BENGAL CHAMBER OF COMMERCE. 121 1869. — - - 1870. 1871. 1872. January. July. January. July. January. July. January. July. KS. A. P. ES. A. p. KS. A. P. RS. A. P. B8. A P. us. A.r. RS. A. 1'. KS. A. V. 6 4 6 11 6 10 6 12 5 10 5 14 5 11 5 15 6 6 7 3 7 3 6 10 5 3 6 c 6 9 1 10 1 14 1 13 6 1 13 1 11 1 11 1 10 1 12 10 15 15 1 14 14 6 14 3 15 33 4 32 31 4 29 10 29 12 30 8 32 12 41 8 34 8 32 4 31 4 29 8 29 12 30 4 32 8 41 4 31 4 31 31 4 28 12 28 8 29 12 31 12 44 2 9 2 12 2 13 2 14 2 13 3 3 2 6 4 3 9 4 8 2 8 7 12 7 2 7 6 6 14 8 8 100 103 100 105 6 100 95 97 120 47 45 49 49 55 55 64 58 285 317 8 — 295 — 332 8 — 285 — 297 8 — 280 — 320 — 260 — 295 — 280 — 325 — 225 — 237 8 — 225 — 262 8 18 20 20 4 26 8 25 8 25 24 26 17 8 19 12 20 26 25 24 8 23 8 25 8 88 81 85 85 72 8 75 67 65 75 70 fl 75 65 45 50 40 40 32 27 30 40 47 8 50 50 53 23 22 26 33 42 8 45 45 50 4 14 4 13 4 12 4 13 4 9 4 6 4 8 5 4 10 4 10 4 8 4 10 4 4 4 4 4 5 4 12 2 8 2 12 2 — 2 2 2 3 2 4 1 14 2 10 — 2 2 9 2 3 2 3 2 4 1 13 6 8 6 2 6 4 6 14 8 7 5 7 12 8 4 6 6 6 6 2 6 12 7 12 7 2 7 10 8 2 26 25 25 27 12 24 8 22 20 8 24 26 24 25 27 8 24 8 22 20 8 24 25 22 23 26 8 21 20 20 23 — — — — — — — — 26 26 24 8 27 8 24 21 20 8 23 8 27 26 25 8 28 25 22 8. 21 24 8 11 10 12 u 12 8 11 12 11 12 11 8 11 4 — — — — 9 8 8 9 8 8 — — 8 4 — 6 4 5 12 6 6 — s. d. s. d. s. d. s. d. s. d. s. d. .5. d. s. d. 1 "if 1 11^ / 2 1 Uf 1 11 1 llf 2 oi 1 llf J. E. O'CONOR, Assistant Secretary. Ari'. XIV. o 54648. Q 122 App. XIV. KOYAL COMMISSION ON GOL.U AND SILVEltJ No. 1.(6) — Prices in Calcutta of certain Staple Commodities froji 1873 to 188(5, 1873. March. 1874. March. IMPORTS. Gret Shirtings : 8J lbs. Mule Twist : White, good. No. 40 ,, Turkey, red. No. 40-12 lbs „ Grange, Nos. 40 to 60 Copper : Sheathing ... ,, Braziers - . . „ Australian - . . Iron : Flat, bolt, bar and square Spelter : Hard - - - - Gold : Australian, 23 carats, fine Bar silver in London ... EXPORTS. Castor oil (good to fine, or No. 1 fine pale) Hides : Buffalo, slaughtered, Patna „ cow, slaughtered Indigo : Good .... Jdte : Picked .... „ ordinary .... „ gunny bags (2nd middling, com- mon). Lao Dte : Fine - . - . „ middling ... Shell Lac : Fine orange „ middling . Seed, Linseed, fine, bold, clean . „ rape (yellow mixed 2 per cent.) „ til (black 4 per cent.) „ poppy (3 per cent.) Eice, Moonghy . „ Ballam - . . _ Saltpetre, 3 ■ 4 per cent, refraction Silk, raAv, Oossimbazar - . . „ Gonatea ... „ Jungypur „ Eadanagore ... „ Surdahs - - _ Sugar, Benares .... „ date, Gurpatta ■ - „ Dulloah .... Tea, fine Pekoe .... „ good Souchong ... „ Congoti - - . _ Tobacco (Rungpur) Wheat, Doodiah - - . . Per piece Per Morah Per lb. PerFy.Md Per sicca weight. Per oz.stan- dard(inrf.). Per B. Md. Per corge PerFy.Md. Per bale, 400 lbs. Per 100 Per B. Md. RS. A. p. 5 15 6 5 1 10 15 39 12 39 12 35 4 8 7 2 16 11 59- 7.5 Per Fy. Md, Per Fy. Seer Per B. Md Per lb. Per B. Md. 12 10 120 68 262 8 18 4 17 12 22 55 45 59 55 4 7 6 4 7 4 5 6 5 2 2 4 2 2 7 13 U 22 8 22 21 23 24 12 9 12 7 8 15 6 11 8 3 6 RS. A. P. 5 8 6 1 1 13 ]5 3 39 14 39 2 40 2 5 8 16 8 58-125 12 12 115 72 ■ Nominal 25 2 21 11 21 8 48 35 88 82 5 7 6 3 15 6 4 3 6 4 13 6 3 7 3 4 6 5 20 20 18 20 21 10 8 7 8 1 2 6 12 6 Nil (a) 8 3 10 1875. March. RS. A. r. 5 2 5 11 1 10 6 14 1876. January. RS. A. p. 5 1 5 9 18 12 40 12 40 12 37 12 4 3 10 9 16 13 d. 57-375 10 12 1877. January 4th. 100 66 24 3 21 2 19 40 20 108 103 4 5 3 116 3 10 6 3 11 6 Nil 2 6 5 14 14 14 13 13 8 14 8 7 4 1 3 6 13 9 12 6 2 15 39 12 39 10 37 14 3 7 17 d. 54-875 RS. A. P. 4 10 16 13 3 36 12 36 12 35 3 10 3 1878. January 10th. 10 90 53 240 25 11 21 11 18 8 30 10 62 52 4 (6) 3 12 4 4 4 2 6 2 8 2 8 5 10 12 12 11 U 13 7 15 10 6 8 6 9 2 9 d. 57-25 14 112 8 65 290 27 7 25 2 21 38 18 40 33 4 9 4 10 4 9 3 6 3 5 6 4 22 21 20 22 24 Nominal Nominal 1 7 13 6 10 Nil 2 15 RS. A. p. 4 5 5 1 6 6 12 6 34 4 34 4 33 2 11 9 9 17 8 53-875 14 8 90 8 49 230 26 5 22 4 32 15 29 24 4 12 (c) 4 14 5 9 4 14 3 8 3 9 7 18 17 8 17 18 18 8 Nominal Nil Nil 16 U 6 8 6 (rf) 7 3 9 id) Price on 24th January 1878. (e) Price on SOth December 1879. (/) Price on 29th 'jlu^'ar™ iTsI"" i^''vS^.onmi:'}':Sl^^^T. GOVERNMENT OF INDIA, 1 n"ar,yi884. Department of Finance and Commerce. J APPENDIX. COMPILED FROM THE " CALCUTTA PrICB CdrRENT " OP THE BENGAL CHAMBER OP COMMERCE. 123 1879. 1880. 1881. 1882. 1883. 1884. 1885. 1886. January 9th. .Tanuaiy 13th. January 4th. January 7fh. • January 15th. .Tanuary 14th. January 5th. January 11th. July 10th. ES. A. P. ns. A. p. K8. A. P. ES. A. P. KS. A. p. RS. A. p. IIS. A. P. KB. 'A, P. Its. A. P.! 4 8 4 13 4 13 6 4 10 4 14 4 7 6 4 8 5 ~ 4 10 5 5 5 3 5 2 4 9 — 4 7J 4 3 4 1 1 4 3 1 3 6 I 2 __ 14 3 1 15 14 9 15 11 13 13 3 12 9 0,12 12 6 11 6 11 10 10^ 32 33 32 4 35 8 31 12 30 10 25 4 22 12 — 32 33 82 4 35 8 31 12 30 10 25 4 22 12 — 31 8 31 31 4 31 1-2 29 2 28 24 10 21 20 12 0, 2 8 3 5 2 8 3 3 2 11 2 13 2 7 2 4 -- r 8 8 2 6 15 6 14 5 10 5 12 6 6 14 7 8 18 12 d. 49-625 IS 3 d. 52-3125 18 10 d. 51-5 d. 51-875 18 14 d 50- 25 18 12 d. 50-75 19 14 d. 50-0 21 5 d. 46-4375 21 14 6 d. 44-4375 15 12 8 10 8 — 10 4 11 10 10 — 83 115 112 100 104 85 — 105 92 13 61 100 65 - 66 70 68 69 63 66 ; 300 317 8 275 305 280 307 8 270 280 Nominal 28 31 28 8 25 17 8 29 8 20 (025 24 25 2 29 25 8 23 15 8 27 8 18 (021 19 8 21 14 19 8 24 8 26 21 8 23 4 20 12 18 12 — ' 30 40 27 20 15 Nil — — — — 25 17 12 7 Nil -- — — 37 93 73 55 47 58 33 35 31 32 83 62 46 41 50 29 29 25 8 Nomiual — — 4 1 3 13 4 5 4 6 4 8 4 8 6 4 13 4 10 Nominal — (0)4 2 4 12 (c)3 14 (Z)3 8 3*11 , 5 4 6 5 2 6 4 4 3 13 4 7 4-12 Nil 3 13 Nominal 5 3 4 4 4 15 3 10 4 14 2 3 15 (good) 1 14 (/)3 13 2 4 6 (9)4 7 3 3 4 3 9 (A)2 15 6 3 12 6 2 14 3 14 3 2 2 5 2 2 5 3 6 6 2 15 3 2 6 2 13 9 6 14 7 7 7 6 7 6 1 5 3 6 3 6 14 8 19 12 17 8 19 8 17 4 15 13 18 17 8 Nil 20 16 8 Nil 17 C 15 13 18 17 14 17 8 15 8 16 4 14 8 13 11 18 Nil 14 19 8 Nominal Nil 16 14 8 12 17 16 8 1,5 20 8 17 12 19 12 19 15 13 8 19 — Nil — — ~ — — — — — .. 8 4 11 9 9 4 9 8 Nil — — , 8 4 10 9 8 8 8 8 ~ Nil — 8 8 1 4 1 3 6 1 5 1 3 6 1 1 1 2 14 — 10 3 7 6 9 7 9 6 8 6 7 6 7 C 9 6 6 8 9 6 7 5 6 6 5 6 6 — 5 8 (e)6 8 Nominal — — (A)10 7 8 — — 3 11 — 3 1 3 4 2 13 6 2 8 6 2 6 9 2 8 2 9 M as not shown in the price current. (6) Of 3 per cent. (/;) Price on 7th April 1SS4. (i) Price on 35th January 18S6. • (7c) Old. (o) Of 4 per cent. Pi icr on 22ua March 1836. (l) Price on 23ncl February 138G. J. E, O'CONOR, Assistant fiocrctary. Q 2 124 App. XIV. EOYAL COMMISSION ON GOLD AND SILVER: No. II. — Vauiations in the Wholesale Pkices of ceetain Staple Commodities 1873, 1874. March June. July. Septera ber. - Decern .ber. March June. Septem- Decern ber. ber. - IMPORTS. Grey Shirtings, 8j lbs. 100 99 — 97 9^ — 97 87 84 Mule Twist, white, good, No. 40 100 97 99 90 9f 95 92 9(» 91 „ Turkey red, No. 40-1 2 lbs 100 104 112 108 115 lis 106 104 — „ Orange, Nos. 40-60 100 113 - 110 107 102 95 90 93 Copper, Sheathing - - - 100 101 99 97 102 100 95 — 100 „ Braziers - . . 100 — 97 96 102 98 95 97 100 „ Australian - - - 100 106 110 100 109 115 106 101 106 Iron, flat, bolt, bar and square 100 109 111 112 115 122 108 100 89 Spelter, hard - - - . 100 105 — — 114 100 105 114 118 Gold, Australian, 23 carats, fine 100 100-37 100-74 — 101-87 98-88 100-37 100- 100-37 Gold* 100 100-74 100-63 101-06 103-04 102-79 101-27 103-57 104-37 EXPORTS. Castor Oil (No. I, fine pale) - 100 — — — ~ 101 — — — Hides, Buffalo, slaughtered, Patna 100 97 94 — 92 96 — 92 88 „ cow, slaughtered 100 — 94 100 — 106 100 — — Indigo, good - - - - 100 Norn. — — 110 Nom. — — Jute, picked - - - - 100 97 — 119 144 137 144 ~ 137 „ ordinary ... 100 81 — 103 129 123 129 — 123 „ gunny bags - - . 100 — — ~ — 98 — — — Lac dye, fine - - - - 100 95 — — 87 — 55 — 60 „ middling - - - 100 89 — 40 78 — 33 — — Shell lac, fine orange - - - 100 112 115 127 129 149 161 166 183 „ middling - - - 100 113 116 131 127 149 155 173 187 Seed, Linseed, fine, bold, clean 100 102 105 108 111 123 103 106 no „ rape (yellow, mixed, 2 per cent.) 100 — ' — — — 89 ~ — — „ til (black 4 per cent.) - 100 — — — — 97 ~ — — .. poppy (3 per cent.) 100 — — — — 95 — ~ — Eice, Moonghy ... 100 97 139 108. 150 153 161 Nom. . . „ Ballam - - - - 100 101 100 — 165 153 167 — 153 Saltpetre, 2 -4 per cent, refraction 100 94 — 95 91 81 80 86 83 Silk, raw, Cossimbazar 100 89 93 84 80 89 80 60 58 „ Gonatea - - . 100 91 95 86 82 91 82 52 59 „ Jungypur - 100 90 88 81 79 86 81 59 „ Kadanagore 100 87 — 78 76 87 76 59 56 „ Surdahs 100 87 92 83 79 8? 83 58 56 Sugar, Benares ... 100 — 94 — — 87 — — „ date, Gurpatta 100 97 87 82 — 77 — — „ Dulloah 100 96 86 100 — — 96 _ Tea, fine Pekoe - - . 100 109 126 123 — 119 126 119 123 „ good Souchong - - - 100 114 — — — — 123 118 123 „ Congou . - - - 100 112 125 — 119 Nil 137 — 150 Tobacco (Rungpore) - - . — — — — — 100 — — Wheat, Doodiah 100 94 — lOV 115 107 Ill 100 96 These prices of Gold are calculated from the i APPENDIX. AT Calcutta ; taking the Prices of March 1873 as = 100. 125 March. 86 92 102 103 103 108 93 148 100-74 104-14 85 83 97 132 119 86 73 44 96 83 84 73 Nil 112 75 62 64 62 59 60 126 125 75 87 1875. June. September. December. 85 92 99 100 106 85 137 101-12 107-03 84 122 100 166 164 90 126 73 56 114 125 76 84 87 96 88 100 102 78 136 105-40 7.1 74 119 103 55 22 149 127 128 141 76 53 55 52 52 52 72 129 109 112 78 94 87 102 101 108 78* 148 101-87 106-46 78 90 125 113 119 100 92 1876. January. 117 135 74 40 43 43 39 42 135 104 119 85 86 92 80 101 97 110 81 108-87 79 79 91 141 123 84 105 95 90 84 98 81 111 118 72 53 55 52 48 46 February. March. April. 95 106 112 76 84 91 98 87 100 101 109 79 168 111-91 71 95 137 97 82 115 123 70 58 59 55 54 54 Nom. 90 92 99 107 151 104-87 111-72 Nom. 128 119 45 102 87 114 119 142 109 112 74 84 86 101 109 82 152 102-99 60 131 98 73 85 115 69 56 57 59 56 56 Nom. 68 N. N. N. Ai-i-. XIV. in Sterliii'-' of Bar Silver in the London Market. 126 ROYAL COMMISSION On GOLD AND SILVER; p. XIV. No. II.- -Variations in the wholesale prices of certain Staple Commodities 1876. --- - May. June 12th. June 26th. July 10th. July 24tb. August 7th. August 21st. Septeuibe 4th. r IMPORTS. Gray Shirtings (8j lbs.) - , - 83 80 — — — 82 80 79 Mule Twist, white, good, No. 40 84 86 84 — 86 84 • — — „ Turkey, red, Nos. 40— 12 lbs. - 88 — 90 — — — — — „ Orange, Nos. 40—60 87 88 — — 90 — — — Copper, Sheathing . - - 99 — - — — — 98 — „ Braziers . - - 101 — — — 100 99 — — „ Australian . . - 103 107 106 — — 104 102 99 Iron, flat, bolt, bar and square 79 75 73 — — 72 71 — Spelter, hard - - - - 148 — 150 151 153 — — 152 Gold, Australian, 23 carats, fine 103-37 107-86 — 110-86 113-86 110-86 107-86 113=86 Gold* . . - . 114-90 115-46 118-31 127-18 120-71 116-58 115-45 116-02 EXPORTS. Castor oil (No. 1, fine pale) - — — — .... — — — — Hides, buffalo, slaughtered, Patna 63 65 — — — — — — „ cow, slaughtered 78 — 74 — Nom. — — — Indigo, good - - - - Nom. — — — — — — — Jute, piclced - . - - 137 — — 134 144 — — 137 „ ordinary 121 124 123 119 129 127 — 123 „ gunny bags — — — — — — — ~ Lac dye, fine - - - - 55 — — 56 — — — — „ middling . - - 33 - — 27 — — — — Shell lac, fine orange - - - 93 85 — 81 80 76 — 78 „ middling 76 69 — 65 62 60 — 64 Seed, Linseed, fine, bold, clean 81 86 87 91 111 91 88 — ,, rape (yellow, mixed, 2 per cent.) — — ~ — — — — — „ til (black 4 per cent.) - — — — — — — — — „ poppy (3 per cent.) — — — — — — — — Rice, Moonghy 114 112 — — 125 119 117 — „ Ballam - - - - 115 — 117 — — 115 112 — Saltpetre, 2 • 4 per cent, refraction 68 73 — 79 — 77 — — Silk, raw, Cossimbazar 56 64 67 84 93 — 107 — „ Gonatea - - - 57 61 66 86 95 109 — „ Jungypur - 59 64 71 79 100 — — — „ Radanagore 56 58 72 83 96 — 102 — „ Surdahs 56 64 71 85 9G — 104 — Sugar, Benares Nom. 75 83 Nom. — — — — „ date, Gurpatta • - - Nom. 68 — — 72 — 77 „ Dulloah ... 83 87 — 93 — — Nom. Tea, Fine Pekoe N. — — 148 _ 142 145 „ Good Souchong - N. — 127 136 127 145 114 118 „ Congou - - - . N. — 1S7 144 137 131 — Tobacco (Rungpore) - — — — — — — ^__ 1 Wheat, Doodiah 70 76 — 79 74 — 79 76 GOVERNMENT OP INDIA, 1 DEfjilJTMENT or FlNANCK AND CoMMEHCE. J • These prices ot Gold are calculated from the prices APPENDIX, At Calcutta; taking the Prices of March 1873 as = 100— contiinwiJ. 127 Aw. XIV. 1877. January 4th. 1878. January 10th. 1879. January 9th. 78 90 85 92 92 100 67 143 101-87 104-36 HI 94 96 110 150 142 95 69 40 68 60 102 104 105 81 150 156 80 98 95 95 96 100 88 Nom. Nom. 148 123 119 Nil. 87 73 78 87 83 86 86 94 60 134 104-87 110-!) 115 75 72 88 149 101 58 33 49 44 106 110 128 95 155 168 89 80 79 81 78 77 Nom. Nil. Nil. 135 104 106 87 106 76 75 78 73 80 80 90 56 105 112-38 120-4 119 69 90 114 153 142 99 54 63 58 Nom. 108 122 101 189 182 84 64 Nil. 67 61 62 Nil. 84 110 129 68 81 69 109 1880. January 13th. 81 84 75 87 83 83 89 73 114 108-98 114-21 99 96 145 112 169 163 89 73 56 157 157 104 119 96 136 147 88 87 91 83 85 85 113 133 126 82 109 81 1881. January 4th. 1882. January 7th. 1883. 82 82 69 88 81 81 56 97 111-61 116-02 83 93 95 105 156 144 111 49 38 124 113 Nom. 98 95 89 109 95 78 75 74 Nom. 74 92 127 135 64 75 Nom. 91 77 81 85 90 90 91 71 97 115-18 97 117 137 130 118 39 28 93 84 91 88 77 83 94 90 "87 Nil. Nil. 77 1. 82 95 113 126 86 87 96 January 15th. 82 74 54 80 80 80 83 60 79 113-11 118-91 81 87 103 107 96 87 98 27 16 80 75 85 93 102 74 101 109 82 76 77 69 70 79 97 107 110 77 69 84 1884. January 14th. 1885. January 5th. 1886. January nth. 75 76 — 72 62 58 83 76 77 64 77 64 80 70 62 54 81 84 112-36 119-11 117-73 119-5 87 79 71 — 100 101 117 103 162 110 155 loi 106 94 ■Nil. — Nil. — 98 56 91 53 96 98 107 87 109 Nil. 87 78 142 ~ 160 138 78 66 67 58 68 59 62 52 63 52 62 56 87 Nil. — Nil. 116 90 64 55 75 62 125 94 75 72 84 67 57 73 57 57 60 50 97 122-41 128-7 87 93 107 137 118 85 60 53 101 79 88 70 130 149 79 80 82 74 79 64 81 74 July 10th. 64 58 72 59 105 125-83 134-46 97 Nom. 132 110 53 46 102 83 Nom. 74 128 132 77 78 77 Nil. 72 66 61 76 in Sterling of Bar Silver in the london Market. .T. E. O'CONOE, Assistant Secretary. 130 ROYAL COMMISSION ON GOLD AND SILVEE ! Arr. XIV. la B O w o <1 M H H ft (a J/3 Q a EH ?! O W -=! W o M Q H W O o H o o o Pa O P H H P O ft P P^ 6 a OJ bo . J*- s a « Pw a a . <^ -^ o 1=1 w S "S ? + ^ be + O si CD ^ U o ■"^ bo + f « o •G M p,co ■T be + o PhM g S3 " P. ; + P-i w a ^ OJ CD « ft oj (■* CO I + p 03 P4M a S 0) p. S 01 Ph * I So + g ■a K a p< a) r? p^fi; Of S =^ p. SJ to Pn-n ■* o ■?• I 7 .60 I i ■a M O) T'T CO 0^ ^^ er, rsi P5 ■^ lUD O CD »n CiJ CM i> ^^ (T. ■^ '13 r-( O e^ CO -* ■o;:;> « "a II ^ ft . ^ II •-I -9 S II CO Oj ' — I R 00 M 5 '-XCR Pj ft .'Q bo° ■^^^ a) o> H 32 ^ 5 S 2 • CO to 2 ST II *^ L • ^ SJ » r-l Ss-s p.^ g . W 01 eo — ' ■a '" "3 • 00 ~ 4J -H 02 01 O =«: -o;:^ CO 00 CjJ ^ 2? ^ r^ GO :^ ° 00 n as -■^ a tSo! "a ijis Pj^ oq bo'^ • a " o ;I5 +J IM 02 <1 GO a " s CID t-( ft ftOQ OJ . ^^ O in . ft^ ^ Ol -^ Oi ft ^s ■^ -* O 5^ CO C^ O 00 Ci> CO 00 < - iig I"! » S P 3 00 CI bc^o - •;— CO _ i o + ^ci B « '3 ;r- OR 2 II a *^ a O m O *^ S 03 bog O < S; O ^_/ P4 w S II [ft f-H rrj a u bpa o <{ S O^^ Ph u O 00 O^^-^ ft "3 J^ |ci U 01 00 I, U o 1 goa o^^^ p< Ji io boa o 3 f o ■<3 <» O ^w- Pi g ,3 00 II to "-I na 9 .u o boa O "< < O -^ '■ S "S ■* 1 "S °i i Is CO 1 "f^ CO 1 i- rfl rJ3 00 J r- GJ P^ .£3 tC 1 ts CM IS ■i ^ ? «M ' c3 d ' 03 f^ ' =3 ' ii r/" g^ =1 d % 3 "^ ■gM o« , CO 1 03 Q , 03 IC ! y-^ 00 us *"• II ■a « 00 II ^ 00 I— 1 II 00 00 1— 1 II CO i £ 1 i a 1 7; 1 ^r g si a 00 § S < 3 S3 0-3 -w \^ P< '^^ ft •^ Pi I 00 05 M O o H o Appendix. 131 aL O eg ^N <1) CO S t-,^: « 00 ** '4 K O » 2 S _ (M >,3 t~ ^SS I I 1 I I I I -^ « •■« 2 5 i^?r ^ 12 y (186 187 CO I ^ I ! I I I I I . ! App. XIV. o ^• o, o b X' o a 2 S a 00 a o 2 o £S, o OJ ^ =2 c^22 CO ^ --H ?> 2 . OJ CO tS CO 2 '^ CO CD « X t^ -f -. =H , oa Q O fli ;2 ;_, © ^ i?^ 2 ^;0 t^ (J) 00 00 3 ^^ o:) v. ° n S -o H 13 ye (1873 1885 ^ 1 2 years (1861 to 1872). 3 years , 1873 to 1885). S^'< ! I !>• r-i t— !>. i-H OH :; I .Ih + a pq u OS 03 3 a o M m 03 P3 o H F Ci (11 15 S ^ s -^ Ph M P R 2 132 ROYAL COMMISSION ON GOLD AND SILVER : App. XIV. 00 c» o H CO 00 o o t-l m Q H O C4 o D O M 0 00 CO in lo lA lo lo in »o Its o O CO o ts 00 Cl QO c O O Q O +3 ^^ -S 4i (^ ra t; «0 « X" -o OS CS Ol o CO QO 00 CO o o CO !>• 1> lO J> J> i> .|>I>l>.t-i>l>-l>- Ol d (M (M MOT p;«= - '"^ ■* -aj-* '? ■* ^"'S «r^M ;o eo "«- PS «-< p K CO OOCOODOOOOQOOOOO O O O O O O +^ 4J 4S *J -M +3 00 00 00 CO 00 00 00 00 CO OOOOO-C oooooooooooo COOOOOCOOOXOOOOOUGOCOOOOOODOOOOaDQC 00 00 00 00 00 00 00 00 00 GO W t- s CO 00 CO 00 O O Q O ♦- *j -JS 4J 000c: 10 10 10 1(5 >a ■;- »o ; rt'* COCOCOCOCOCOMc^COCOCOW O ""J 00 11^ -? ? o o >o in e-1 •M I-t Cq W C: O ! * 4- -« -;:s +:i 4^ 4:^ -iS 4i CO CO 00 00 00 CO CO GO X -y: ^y; X 00 &: X '^' <;X> CO CO 00 CO 00 rt J> l> t- 1> J> !>• J>- i> t^ !■- i> I:- i> j> i» tr- ^t- t* t:- t- i> t- 00 -d = ^ r-( » ^^0" c c '* ^ -S -< (N a 03 01 -e- (N -^ Ql 1^ *i •* ■* ;$ 'J -# (M 2J ^ N (M M eo CO CO « -* M w CO CO « CO CO eo CO CO CO -? ro :o CO CO W -* CO APPENDIX. 133 e ° a a Ill's. ■■33 2 6m « s u .= 3 o W K rH m «> £ s- Sag .? 3 o I gll sSSJS oM 5|^ ■< = i 5 5 £ -H in C m'O'Owxoioitamo O O in in m ■3-^00 00 00 CO CO 00 QO 00 --■ o q V w „j ~. ^ -S ^ ■** rt o 10 ira 5 5 ^ ^ en 10 -^ • C3 M IN CQt- (N cq N oq ca o o -*^ -t^ ^ ^ - ^ ^ „ o 00 00 00 _■ if t en O] CQ 1^ ; m Pico CO CO WW PS' !>■ ir^ t- i:--■ O <© !>■ C, Ol CO «0 O "<* r-C Oi CTl Cs O ■— ' O^ O Ol "O t^ o o -^ -* ^ o cq O --1 I I I 1 I I I OtO'-f'-'COi— ICOOS"^0» 1— < I— ( I— lOOOOiO"— II— iCOffl .— ( 1-H I— I ^H I I I I I .-H -* 00 i> 00 tn .-> ^ o OS 00 ■-( CO to C4 _ - p'^ .S'-''^ r=i ,, s . ^■^^ g^^ g - I 1 I I I I I I I CO O o o t£> I I i I I 1 I I I a la -i Ofe HK S" ap rf M -iW 111 c. I I tt* Tt* s -p 1^ pq M a . 1^ ft o a 3 o5 h o oocoooooooooooooo oocooooooooooooooo u^«3ir;irtO»n»0OU2'Cir3OW3"5»J3u^*0 Ph o c = o o o = O o « o o 00 o «: 00 CD «) CO ^ to Ph O <5 o o o o o o o o o cq o o o I— I W5 »f5 to ». ift Oi o cq I I I I I I I I I 112 2 (1h O o c CO O o o o o o o c o 00 00 o o o o o o o o 00 OS 05 O o o a OS as O O I I I I I I I I ■i o o o o o o o t^ t^ r^ o o o o o o o o O , O O O 00 00 00 00 lO irj to *o o o o o o 00 o o 00 CO CO i> to t^ to o CM O O O o (N cq O O 00 00 o o o c o o o o OS O O O oi CT cq cq t". t* t^ 1-, H P O 1-J •«1 O „ w on o or> u O ,a f/i a K 14 ■A P^ tJ (5 S CI M &< M n 136 KOYAL COMMISSION ON GOLD AND SILVER: Ait. XIV. Xo. IX. — Average Monthly Rates of Wage in the Muir Mills, Cawnpore. Blowing and Cardroom : Men ... Women ... Children Mule Room : Men Children Throstle Room : Men ... Children "Weaving Room : Men Children 1876. 1877. 1878 1879. 1880. 1881. 1882. R. A. P. 5 4 2 8 4 3 R. a. p. 5 4 8 2 8 4 3 R. A. P. R. A.p. 1 E. A.P. 6 5 8 5 8 4 8 4 12 4 12 2 8 2 8 2 4 4 4 3 2 8 2 12 3 8 3 8 4 2 2 2 4 12 6 4 12 2 8 8 3 R. A. P. 5 8 4 12 2 8 4 2 8 4 2 2 12 E. A P. 5 8 4 12 2 8 4 2 8 5 2 4 5 2 8 R. A. P. 6 14 6 2 8 4 2 8 4 3 5 2 12 E. A. P. 6 14 5 4 2 8 4 3 4 4 2 8 5 3 18SS. 1887 R. A. p. R. A. P. 5 8 5 8 2 8 4 4 3 4 4 3 6 I?, 3 6 6 2 8 4 8 3 4 4 4 3 6 3 E. A. p. 6 6 2 13 4 8 3 4 4 4 3 6 3 Contract Rates for Work in the Mdir Mills, (^awnpore. 1877. 1878. 1879. 18S0. 1881. 1883. 1883. 1884. 1885. 1886. 1887. Mule Room : 20s. to 24s. > 9 pics pies 9 pies 9 pies 9 pies 9 pies 9 pies 8 pies 8 pies 8 pies 84 pies 10s. and I4s. . - 7 „ - - - - - - 7 „ 7 ,. Weaving Room: As. As. As. As. As. As. As. As. As. As.' As. T. Cloth No. 1 - - 6 - 64 - - 5i « 6 6 54 &0 54 & 6 H. T. T. Cloth - - - - - 6 B 6 6 6 64 & 6 64 & 6 Dhootie Chowka - - - 6 - - - 6 - 4 4 Dosootie No. 1-24 and 30 ■ - - 5 6 - 6 5 O 6 6 5 Dammer 3 - - - - 2 2 2 2 2 2 Sheetings No. 3,800 - - n 71 - n n - 1" 7 7 „ 4,000 " n ~ ) Reeling Room : 23«. and 24s. - — — 74 74 ii — 74 74 74 74 74 20s. to 22s. • - - 7 7 7 7 7 - 7 7 7 10s. . - . - 4 4 4 4 APPENDIX. 137 No. X. — The Manockjee Petit Manufacturing Company, Limited. Manockjee Petit Mills, Tardeo. App. XIV. Average wages {piecework and monthly wage) in January of the following years. Department. Designation. 1882. 1883. 1884. 1885. 1886. 1887. R. E. u. R. R. R. Card room - . . - Scutcher - - . 10 9 to 11 9 to 11 10 to 12 10 to 12 10 to 12 )» Grinder - - - 14 to 16 15 to 18 15 to 18 15 to 18 15 to 18 15 to IS .. . - - - Card tenter 8 8 7 to 9 7 to 9 7 to 9 8 to P )» Lap carrier 8 9 9 to 10 9 to 10 9 to 10 9 to 10 - - - ■ Fly „ - - 6 6 6 to 7 6 to 7 6 to 7 6 to 7 » Sweeper - - . 6 7 7 to 8 7 to 8 7 to 8 7 to 8 »» Drawer - - - 12 to 13 12 to 14 12 to 15 12 to 15 12 to 15 12 to 15 »» Sluhher - 13 to 15 14 to 17 14 to 17 14 to 17 15 to 17 15 to 17 >» Intermediate - 14 to 16 15 to 17 15 to 18 15 to 18 15 to 18 15 to 18 - - - ■ Rover ... 14 to 16 14 to 16 15 to 17 15 to 17 15 to 17 15 to 17 >» Spare hands - 10 10 10 to 11 10 to 11 10 to 11 10 to 11 i» DofFer - 6 6 6 to 7 6 to 7 6 to 7 6 to 7 Mule room . - - - Spinner - 18 to 20 18 to 20 18 to n 18 to 22 18 to 22 18 to 22 „ - - " " 1st Piecer 10 to 12 10 to 12 12 to 14 12 to 14 12 to n 12 to 14 - - - - 2nd S. Piecer - 9 to 10 9 to 10 10 to 12 10 to 12 10 to 12 10 to 12 ji - " " Creeper - - - 5i H 54 6 to 7 6 to 7 6 to 7 ,; - - - - Doffer - 6 6 6 to 7 6 to 7 6 to 7 6 to 7 „ ~ - - ' Spare liands 6 to 9 6 to 9 6 to 9 Oto 10 6 to 10 6 to 10 Throstle department Side minder 7 to 8 7 to 8 7 to 9 7 to 9 7 to 9 7 to 9 » " " ' " Doffer - . - 5 5 to 6 5 to 6 5 to 6 5 to 6 5 to 6 *» )) " " " Spare doffer - 7 7 7 to 8 7 to 8 7 to 8 7 to 8 )j « »' Doff carrier 8 8 8 to 9 8 to 9 8 to 9 8 to 9 Eeeling room - - - - Reeler . - - a to 7 5 to 7 7to7i 7 to7i 7to7i 7to7i Bundling; room - - - Presser - 12 to 14 12 to 14 12 to 14 12 to 14 12 to 15 12 to 15 >» »' Dresser - - . 10 to 12 10 to 12 10 to 12 10 to 13 10 to 13 10 to 13 Sizing department - Winder - 5 to 7 5 to 7 5 to 7 6 to 8 6 to 8 6 to 8 „ » ' " " Drawer - - - 8 to 11 8 to 11 8 to 11 8 to 11 8 to 12 8 to 13 » " Warper - 15 to 17 15 to 17 15 to 18 15 to 19 15 to 20 15 to 20 ji " Sizers 25 to 30 25 to 30 25 to 35 25 to 35 25 to 35 25 to 35 >» " Back aizers 13 to 15 13 to 15 13 to 17 14 to 17 14 to 17 14 to 17 » » Heald knitter - 12 to 15 12 to 15 12 to 16 14 to 18 14 to 18 14 to 18 >j " Eeacher - - - 4 5 5 5 5 5 Weaving department Weaver - - - 14 to 20 14 to 20 14 to 20 14 to 20 14 to 20 14 to 20 >> " .lobher - - - 35 to 45 35 to 45 35 to 45 35 to 45 35 to 45 35 to 45 » " Folder and handler - 10 10 10 to 12 10 to 12 10 to 12 10 to 12 54648. 138 ROYAL COMMISSION ON GOLD AND SILVER ; app. xrv. No. XI._ .Coal Company, Limited. Monthly Wage of Miners and Blacksmiths from 1882 to 1887 at the Company's Collieries. January 1882 - January 1888 - January 1881 - January 1885 - January 1886 - January 1887 - RlsiGrATSJ. Miners. B. B4to6 Bito6 54 to 6 64 to 6 64 to 6 64 to 6 Black- smiths. i to 7 & 9 64 to 7 & 9 64 to 7 & 9 to7&9 64 to 7 & 9 64to7&9 MiDHABPUE. Miners. Black- smiths. NlMOHi.. Miners. Black- smiths. SanktoeiI. Miners. Black- smiths. Sodepoee. Miners. Black- smiths. Kuldiha. Miners. Black- smiths. E. 54 to 6 E. 8 E. 54 to 6 E. 8 E. 54 to 6 E. 7 to 8 & 10 E. 64 to 6 E. 9 E. 7 to 8 54 to 8 10 54 to 6 8 54 to 6 7to8&10 54 to 6 9 7 to 8 64 to 6 10 54 to 6 8 5i to 6 7 to 8 & 10 54 to 6 9 7 to 8 64 to 6 8 54 to 6 8 54 to 6 7 to 9 54 to 6 9 7 to8 64 to 6 DtolO 54 to 6 8 64 to 6 9 64 to 6 « 7 to 8 61 to 6 to 10 54 to 6 8 • 54 to 6 8 to 10 64 to 6 9 7 to 8 E. 9 to 10 9 to 11 9 to 11 8 to 11 8 to 11 8 to 11 App. XV. APPENDIX XV. [To be substituted for Table F., Appendix VIII., to First Report.^ Table showing Monthly Exports of Silver to India in 1885 and 1886, with Value of Bills sold by the Seceetaky of State, and of Exports of Cotton Manufactures to India from the United Kingdom. 188.5. 1886. Month. Sale of Bills by Secretary of State. Export of Silver to India. Value of Exports to India of Cotton Twist and Yarn and Piece Goods. Sale of Bills by Secretary of State. Export of Silver to India. Value of Exports to India of Cotton Twist and Yarn and Piece Goods. January - - - Es. l'94-77-800 367,708 & 1,667,972 Bs. 1-41'05157 538,494 1,777,423 February - - - 2-0.5-10-900 620,400 1,447,037 2 07 -96 '000 794,400 1,643,136 March 2-24-05-999 853,882 1,431,402 2-31'33-400 293,100 1,999,605 April - - - 1-28-52-200 639,750 1,280,559 1 ■27- 66- 000 209,417 1,764,929 May •38-01 -000 859,000 1,175,828 ■21 •70-500 333,500 1,756,240 June •37-94-300 449,800 1,218,934 •56 '23 -450 476,864 1,753,573 July •49-21-859 756,100 1,509,135 •67^14^300 435,901 1,600,048 August •28-40-000 824,454 1,619,569 1^76^68^500 432,200 1,870,539 September - 1-07-24-000 446,800 1,653,029 1-81-12^.500 440,200 1,766;916 October - . - ■ l-10-lO-OOO 341,000 1,550,868 •92^98^800 347,400 1,781,643 NoTember - 1- 38- 97 -000 505,599 1,504,035 1-06-01-000 218,151 1,777,474 December - - - 1-65-34-054 444,150 1,697,402 1^83^58'000 360,650 1,463,314 Total 14-27-69-112 7,108,643 17,755,770 15^93^47-607 4,880,277 20,954,840 APPENDIX XVI. MATERIALS FOR THE ILLUSTRATION AND CRITICISM OF THK E(X)NOMIC RELATIONS OF THE PRECIOUS METALS AND OF THE CURB,ENCT QUESTION COLLECTED AT THE EEQUEST OF THE ASSOCIATION FOR THE PROTECTION OF THE ECONOMIC INTERESTS OF TRADE AND INDUSTRY BT AD. SOETBEER. SECOND ENLARGED EDITION. Bbelin 1886. PUTTKAMMER and MUHLBRECHT. S 2 APPENDIX, 141 CONTENTS. Preface . . . . I. — Production of the Precious Metals. 1 2. General survey of the production of gold and silver in the years, 1493-1885 Special statistics of the production of the precious metals, 1851-1885, according to weight. \. Production of gold ; B. Produc- tion of silver - - - . - 3. Special statistics of the production of the precious metals, according to value. A. pro- duction of gold ; B. Production of silver Remarks on the surv^ey of the production of the precious metals : On the statistics of the production of the precious metals - - - . Production of the precious metals in the United States - - - . the precious metals in Production of Australasia Production of Russia - Production of Mexico - Production of the precious metals in the precious metals in the Columbia, Guiana, precious metals in Peru, Bolivia, Chile, Brazil, Germany, &c. Production of the precious metals in the World, 1861-1885 Production of the precious metals in the World in 1883 and 1884, according to the Annual Report of the Master of the Mint, Washington 11. — Relative Value of Silver and Gold. 1. Price of silver in London in the years 1851- 1886, according to the reports of Pixley and AbeU, bullion brokers - . . 2. Relative value of silver and gold calculated according to the price of silver in London Remarks on the surveys of the relative value of silver and gold - . . . Retrospect of the relative value in early times - . - . . Special notes on the same in the years 1876-1886 - . . . III. — Application of the Precious Metals. 1. Coinage. Germany, Austria-Hungary, Russia France, Belgium, Italy - Great Britain, Australia, United States, Holland . - - - . Denmark, Norway, Sweden, Finland, Spain, Portugal - - - - Greece, Roumania, Servia - - - Survey of the coinages, 1851-1885. A. A ccording to countries ; B. According to periods ----- Wearing out of coins 2. Industrial consumption of the precious metals United States (supplementary statistics for the year 1886 on page 179) - Great Britain .... France . . - . . Switzerland- .... Germany (Pforzheim, Hanau, Gmiind, Schorndorf, Berlin, Bremen, Hamburg, Heilbronn, Niirnberg, &c.) Other countries ~ - - Survey of the industrial consumption of the precious metals ... Page 143 145 146 147 148 149 151 162 153 154 158 159 160 161 163 164 166 166 167 168 169 170 171 173 .3. Flow of the precious metals away from civilized countries : Balance of trade of British India in the 50 years, 1836-1836—1884-1885 - Import and export of British India in the 60 years, 1836-1836—1884-1885 Remarks on the tables relative to the balance of trade, and also to the import and export of the precious metals, British India, 1836-1885 Retrospect of the flow of the precious metals to British India in early times - Import and export of goods, British India, 1861-1886 - . . . Import and export of the precious metals, British India, 1851-1886 Application of the precious metals in British India . . - - Indian Council bills . - . Import and export of the precious metals, China . - - - . Export of silver from the Netherlands to the Bast Indies - - - - Survey of the fluctuations in the monetary supply of gold in the civilized lands in the years, 1851-1885 - IV. — Import and Export of Precious Metals. On the statistics of the import and export of the precious metals - . . . Circulation of the precious metals between single States : 1. Between England and France, 1871- 1884 2. Between England and the United ■States, 1871-1885 - 3. Between England and Hamburg direct by sea, 1872-1886 Collective import and export of the precious metals in different States ; 4. Great Britain - . - , 6. France - - - . . 6. Italy (according to the Customs Returns) - - . . 7. United States . . - . 8. Germany . . - . 9. Netherlands, Belgium, Austria- Hun- gary, Russia, the Scandinavian States, and Spain .... V. — Supply and Circulation of the Precious Metals in the Civilized Countries. 1. Stock of the precious metals held by the most important banks, &c. General : (a.) Bank of England, Scotch and Irish Banks of issue - . - . (b.) Banks in Australasia - - . (c.) Bank of France - - - (d.) Swiss Banks of Issue - . . (e.) Italian Banks of Issue. Italian Treasury - - ■ - (/.) National Bank of Belgium - (ff.) Bank of the Netherlands (A.) Austro-Hungarian Bank (i.) Imperial and other Note Banks in Germany - - . . (h.) Russian State Bank - - . (l.) Imperial and other Note Banks in Sweden - - - - . (m.) Bank of Norway . - . (ffl.) National Bank of Denmark - (o.) Treasury and National Banks in the United States .... Summary of the stock of gold in the important banks, &c. ..... Page 174 175 176 if tf 177 178 179 180 181 182 183 184 185 186 187 190 191 192 193 194 195 196 197 198 199 200 201 142 EOYAL COMMISHION OJ^- GOLD AND SILVEK ; 2. Supply and circulation of gold and silver coins, excluding the stock of precious metals of the banks, &c., and supply of gold and silver money as a whole. General (a.) Great Britain, Australasia (b.) Netherlands - - - - (c.) Latin Currency Union, France, Bel- gium, Italy, Switzerland (a!.) Austria-Hungary . - . (e.) Germany . - - - (/.) Scandinavian States - (g.) Russia, Finland (h.) United States Valuation of the combined monetary supply of the precious metals, end of 1885 VI. — Discount and Rate of Escchange. 1. Fluctuations of discount at certain centres- during the years 1851-1885 - - - 2. Course of Exchange on London in the years 1851-1885 VIL — Changes in the Price of Goods in general, and in the purchasing Power of Gold. 1. Determination of prices in early times through the supply of the precious metals. Hel- ferich's opinion . _ . - 2. Opinions as to the causes of the fall in the price of goods and of the depression of trade in the last century . . - - Goschen, Giffen, Arendt, H. Schmidt ■' Hansard, Nasse, a German artizan, P. Leroy Beaulieu . - - - 3. Statements of the cost of living, &c. in modern times ------ General remarks - - - - Wages in Hamburg, 1848-1886 - ^ - Salaries of Government officials of the Prussian State Railways in the years 1850, 1860, 1872, and 1886 Revenue of the farms of the domain of the Prussian State since 1850. Results of the granting of leases for the farms of the domain, the leases of which fell in from 1874 to 1886 Rent of dwelling-houses in Hamburg Estimate of cost of housekeeping in Bruns- wick, 1850-1885 Cost of maintenance in the Hamburg General Hospital (Survey of the Report of the Coal Mines in Hainault, 1860-1885) (Remarks on the substitution of credit for cash payments) . - - - Page 201 202 204" 205 73 206 207 209 210 211 212 214 215 217 218 219 4. Approximate estimates of the fluctuations in the level of the general price of goods " Index Numbers " of the " London Economist" on the variation of the prices of goods from 1861 to 1886 com- pared with those of 1845-1850 . " Index Numbers " with reference to the relative importance of the above articles, 1869-1885 - - - . Price of products in British India - Average wholesale prices for 100 important articles of commerce according to the inquiries of the Hamburg Bureau for Trade Statistics for each of the years 1851-1885, with the corre- sponding proportionate numbers for comparison with the prices from 1847-1860 1. Group. Products of agriculture, &c. (20 articles) - - ' - ' - 2. Group. Animal Products, &c. (22 articles) 3. Group. Tropical fruits, &c. (7 articles) - 4. Group. Colonial produce (without cotton) (19. articles) . . . . 5. Group. Mineral products (14 articles) - 6. Group. Textile materials (7 articles) 7. Group. Miscellaneous (11 articles) (8. British articles of export) (14 articles) Summary of the proportionate numbers of the separate groups, and of the collected articles - . - . - Final remarks - . . . Supplement. — Mint regulations of different States according to the existing laws and regulations of the Mint, with especial reference to the currency question .... Great Britain, British India, and British Colonies - . - . . United States of America ... Germany - _ - . _ Scandinavian States • . - . The Netherlands . - - . France, Italy, Belgium, and Switzerland Page 219 220 221 221 223 225 228 229^ 232' 233 235 236 238 239 241 242 APPENDIX. 143 PREFACE. In the beginning of May 1885 I was askeil by the president of the Society for Preserving the Economic Interests of Trade and Manufactures to bring together '■' Materials toward the Elucidation of the Economic (]!on- " ditions affecting the Precious Metals and the Question " of Standard of Value," which were then to be published for the use of its members and others interested in these problems. The great extent of the task, and the peculiar difiBculties of carrying it out with the necessary exactness and completeness, were immediately apparent to me, while, on the other hand, I had to acknowledge that it was timely and important in the present stage of the silver question. This last consideration, and the fact that I had already prepared materials relating to the question, finally overcame my hesitation, and I declared myself willing to undertake the execution of the desired publication. This was done, nevertheless, on the express condition that full assistance should be rendered by the Bureau of Trade Statistics in Hamburg, whose liberal assistance I had had the pleasure of enjoying in previous investigations. This was promised, and has been rendered to me, as well in the first as in the present second edition, in the most friendly and complete manner. If the materials here put together fulfil the intended purpose and prove of permanent statistical value, the credit belongs, after the original movers in the society mentioned above, to the complete and thorough co-operation of the Hamburg Bureau of Trade Statistics, and especially to its head, Mr. G. G. Heinz. Without this indispensable aid the present publication, notwithstanding all the previous preparation and all other aid, would have been quite im- possible. The supposition on which the work was undertaken was at first that it was only to have statistical and historical contents, and that discussions of principle on the merits of and objections to the gold standard and the double stan- dard, as well as controversies on coinage policy, were to be excluded. On that account the endeavour was made to render the selection and presentation of opposite opinions (in so far as their presentation was necessary to an under- standing of the Materials) quite impartial. Further, it was necessarily my point of view, when once the collection of materials had been taken in hand, to keep these as free as possible from all superfluous even though perhaps interest- ing discussions ; while on the other hand desire for brevity, or consideration as to the number of pages, was not to induce me to omit or abridge anything which it was of practical or scientific interest to learn or to have completely presented. Consequently the Materials have become of considerably greater size than had been originally intended. We hope, however, that this will be so much the less a reproach, since the increase has been in part brought about through the fact that the information communicated by the great banks and other official sources, which has not before been brought together in such completeness, has been set forth in all detail. The same considerations have been kept m mmd m this second edition. For the rest, it has been completed in essential points, and in large part revised. In the first place, and as a matter of course, the statis- tical results of the year 1885, and averages from 1881 till 1885, instead of those from 1881 till 1884, were inserted. In regard to the other changes and revisions of importance, further information will be found in the various parts of the work. , . ^ ■, . The first part of our work consists necessarily ot surveys of the production of gold and silver. On this point I have used my own earlier estimates, and from these have taken in a concise abstract the more important points, with the needed explanations. For recent years the latest and most trustworthy data have been inserted ; in part they have been reached through inquiries of the German diplomatic representatives in the different producing coun- tries, which have been kindly undertaken at the request of the Ministry of Foreign Affairs in Berlin. The statements and estimates of the production of gold in recent times show a considerable decrease in comparison with the first decades after the discovery of the Californian and Austra- lian gold fields. I estimate the production of gold some- what higher than is usually the case in England and in the United States. The difference arises because I have felt compelled to put a higher estimate on the production outside of the United States, Australia, and Russia. This accessory gold production, if so it may be called, has been assumed by us to be for the last five years between 23,000 and 24|00() kilograms annually, which is rather too low than too high an estimate. The approximate correctness of my estimate of the pro- duction of the precious metals, I venture to emphasize the more because even in very recent tiroes and in promi- nent publications dealing specially with such subjects (for instance, in the Journal of the .Institute of Bankers, March 1886, page 176) strikingly, low statements of the yearly productions of the precious metals appear. I reproduce the statements of Sir Hector Hay there given for the years 1881-1885, and opposite them place my own estimates : — App. XVI Gold. . Silver. Years. Hay's Estimate. My Estimate. Hay's Estimate. My Estimate. 1881 Million M. 393 Million M. 443 Million M. 376 Million M. 397 1882 330 «4 410 424 IS83 330 iOi 360 434 1884 330 iOS 311 443 1885 330 (ca. 410) 350 (ca. 453) The detailed statements and estimates and reasonings in regard to the production of the precious metals in the important countries {see pages 17, seq.) should leave no doubt that these figures, as remarked above, are consider- ably within the facts, and are not to be considered as in any wa,y exact. For a long time, in the controversies over bi-metallism, the estimate of the varying gold and' silver production from year to year was apt to be treated as the most important factor in the question of standards. An impartial con- sideration of facts supports the view that, while in course of time the general conditions of the production of the precious metals may exercise a decisive influence, it makes little difference whether in particular years the production of gold and silver varies by a few per cents., or possibly by half a per cent. The total production of the precious metals from 1851 till 1885 may be estimated approximately at 6,383,000 kilograms gold and 57,664,000 kilograms silver. The annual production on the average of the last five years, 1881 to 1885, amounted to" about 149,000 kilograms of gold, with a silver production of more than 2,800,000 kilograms, while on the average of the years 1856 to 1860 there were produced approximately 201,750 kilograms gold and only 904,990 kilograms silver. ' .. The calculation of the value of the silver product has undergone an essential change in this second edition of the Materials. After the price of silver in recent years had undergone so enormous a change that the ratio of silver to gold in free markets was nearly 21 to 1, it appeared no longer proper to follow the former ci'stom of estimating the value of silver throughout on the ratio of 15^ to 1. But, obviously, consistency required that if for recent times the actual ratio of silver to gold was to be used in calcula- tions, this actual ratio should also be used, wherever possible, for earlier times, in calculations of the value of the silver product ; for instance, for the periods when the ratio was less favourable to gold. If for the period 1881 to 1885 the kilogram silver was considered equal to 150 marks, German gold, then for the period 158 1 till 1600 the kilogram silver was to be reckoned as 236 marks of gold. The second part gives monthly statements of the ratio between gold and silver from 1851 till August 1886, on the basis of London prices of silver. Here there can be no question of any uncertainty in the data. In the decade 1841 to 1860 the a\'erage price of silver in London was S9-|- pence per standard ounce (ratio, 15'82 to 1) ; in the decade 144 EOYAL COMMISSION ON GOLD AND SILVER: App. XVI. 1861 to 1870 it was nearly 60 pence (ratio 16-48 to 1). In llie first nine months of 1886, hQwe\er, it was only 45-Sj.- pence (ratio, 20'87 to 1). In consideration of the extraordinary interest which attaclies to the great changes that have taken place in the course of centuries, and especially in recent times, in the ratio of gold to silver, we have considered it proper to treat the history of the ratio in the new edition with greater detail than in the first edition. We hope that this addi- tion will be welcome to many readers. It will appear from it that more than 2,000 years ago the ratio of the precious metals already occupied men's minds, and that in former centuries the relative value of gold rose consider- ably within a comparatively short space of time. The third part is concerned with the important and difficult task of the consumption and location of the pre- cious metals. So much aa ;s used for coinage may be ascertained with exactness from the records of the mints. Our figures show that, in civilized countries, in the period of 35 years, from 1851 to 1885, about 2.3,104 million marks of gold and more than 7,606 million marks of silver (nominal value) were coined ; that is, considerably more . gold has been coined than was newly prodnced in that period. This is explained by the cinoumstance that large quantities of gold coins have been melted down and re- coined. In recent years such .recoinages seem to have diminished very, much, as regards those coins for which there is likely to be, sooner or later, a prospect of remitting them with profit to the country whence they came. In regard to silver coins, as well legal tender as subsidiary coins, the case is different. The coinage in civilized countries since 1875 by no means equals the production of silver, and what once has been coined remains in circula- tion, except in so far as it is retired by the Governments or is lost. The industrial use of the precious metals was first especially investigated by us in 1881, so far as it was possible to obtain information about it, although it was obvious at the outset that exact results were not to be expected. In the present Materials it has been attempted to complete and carry further the estimates on this point. According to these estimates it seems necessary to assume that, although the industrial use of silver in European countries is nearly stationary and is much below the recent production of sih'er, the use of gold for ornament and other purposes in the arts shows a tendency to grow, and absorbs a very considerable part of the annual production of gold. Upon the whole, the present annual industrial use of gold is estimated by us at, in round numbers, 90,000 kilograms. We believe that this estimate may be accepted, although the investigations which the Director of the Mint of the United States has made in regard to the use of ihe precious metals in the- arts for the year 1885 show a considerable smaller use than a similar investiga- tion indicated for the year 1883. (See below, pages 69 70). It must be remembered that in our estimate of the use of the precious metals in the arts, not single years, but averages of several years are considered, and that, if a partial diminution of the use of gold for. certain kinds of ornament may appear; on the other hand, the increase of population and wealth in the European countries in one or another way, no single way, perhaps, noticeable, lead on the whole to an increase of the non-monetary use of gold. In this third part a complete presentation is given, also, of the flow of the precious metals to Eastern Asia, in which not only the enormous shipments of silver, but in recent years also the exports of gold to India (amounting between 1880-81 and 1884-86 to more than 94,000,000 marks per year) deserve special attention. In the fourth part the much- discussed subject of the mo\'ement of the precious metals from country to country is laken up. In the statistics of the international trade of some of the most important countries, the figures in regard to the export and import of the precious metals show, as our comparative statements make jilain, the most extraordinary divergencies. It is much to be wished that the presentation of these divergencies for a series of years, especially in regard to France, may induce the authorities to investigate thoroughly (as has not yet been done) this state of things. It is the more welcome that in those countries which are above all to be considered, England and the United States, the general agreement of their statistics in regard to the movement of the precious metals during longer periods gives us- an assurance that, on the whole, we have positive data for the approximate ascertain- ment of the most important international movements of the precious metals. The practical agreement of the figures in the statistics common to these two countries, which it is impossible to ascribe to mere accident, permits us to assume that the data of their intercourse in the precious metals with other countries do not vary too iar from the facts. If, notwithstanding the obvious inaccuracy of the statistics, our Materials present a series of tables in regard to the export and import of the precious metals in several countries, we have been influenced by the consideration that these figures, since put together for each country on the same plan, may serve for comparing different years with each other. There would have been no difliculty in in- creasing considerably the number of such tables, but the need of conciseness required some limitation. In the fifth part, which considers the probable supply of the precious metals on hand in European countries, we have given the information offered us in the most friendly manner, and in sufficient completeness, by the administra- tions of the leading banks. We have given separately the amounts of gold and silver in the great banks and in certain treasuries at the end of each year since 18/1, and for certain banks since 1851, so far as positive statements were to be had. The extraordinary interest for the question of standards which attaches to these exact figures is obvious. Unfortunately there are gaps, but on the whole, one grasps readily the shiftings which have taken place in the accumu- lation of the great stock of gold and silver. The development of credit and of clearing house trans- actions in the wholesale trade of recent times has been the means by which the cash holdings of most great banks have remained iu wonderfully small proportion to the enormous quantities and the gigantic total of the exchanges based upon them. A few decades ago, in the larger trading countries, these exchanges took place chiefly by means of » bank notes, of which a larger or smaller part was not covered by coin. The rise of prices, speculation, and com- mercial crises were in those times ascribed mainly to ex- cessive issues of notes, and it was supposed to be of particular importance for commercial statistics to have continual information as to the notes in circulation and the coin held by the banks for their redemption. Since the accounts of most of the banks of issue state, in addition to the coin reserve, the amount of notes in circulation, it is possible to ascertain the amount of uncovered notes which form an equally important and equally effective circulating medium as the notes represented by actual coin. Our Materials give, in the usual manner, the note circulation indicated by the official statements. But we have not refrained from pointing out that checks to order and de- posits payable on demand have been equally important lor the quantity of the circulating medium and for the pur- chasing power in existence as bank notes, and that in this state of affairs it would be more proper to set these obhga- tions side by side with the note circulation. We have put together {see page 109 below), according to the figures that lie before us (completing them by estimates in some cases), the coin holdings of the banks and certain treasuries at the end of calendar years, and the results reckoned in German marks are as follows : — 1877 1878 1879 1880 I88I 1882 1883 1884 1886 Million M. - 2,890 - 2,860 - 3,500 - 3,790 - 3,900 - 4,070 - 4,600 - 4,680 - 5,040 A continuous increase appears in these coin holdings, which form the secure metallic basis for the gigantic ex- changes of domestic wholesale trade and for the inter- national movement of gold. Whether this increase is to be explained by the fact that the ordinary use of money m retail trade continually dispenses with large quantities of gold coins, and permits these to flow into the banks, or whether, notwithstanding the decrease in gold production, considerable parts of the annual product are added to the monetary gold supply, we do not undertake to say. Opinions differ on this point. But certainly a careful study of the changes in the coin holdings of the individual banks is of special interest, and complete and careful in- formation in regard to it will be welcome. In the main, we have to deal here only with positive statistical facts. To the general statement of the coin holdings of the banks we add in our Materials an attempt to estimate the t^otal monetary supply of the precious metals in the different civdized countries. Our estimate of the pre- sumable existing quantity is 13,212,000,000 marks of gold, and 7,843,000,000 marks of silver (nominal value). France has possessed for some tiine, and still possesses, by AlM'liflDIX. 145 far the most imporlaut luuneiury supply uf gold and silver. The sixth part contains a (reneral statement, for the period from 1861 to 1885, of the rate of discount at some of the more important centres of trade, giving the highest, the lowest, and the average rates in each year. It con- tains also a corresponding statement of the more important rates of foreign exchange. It goes without saying that we have made special endeavours to present these data cor- rectly, from the best sources. _ The seventh and last part will perhaps excite the liveliest interest in many quarters, since it is concerned with the much-discussed and difficult problem of the lowered level of the prices of commodities and the pur- chasing power of gold. This part has also been treated with the greatest fulness, since it was impossible to restrict the exposition to mere statistical data, but was necessary to communicate as clearly as possible the opinions and reasons of the opposing authorities and parties, and to present them without bias. We doubt whether we have succeeded in doing this in a manner that will satisfy all persons ; but there has been no lack of good wiU. We have given, as a rule, in the words of the writer himself, even though necessarily in a condensed quotation, the opinions put forth in recent times on this question by various authors — on the one hand by Goschen, Giffen, Herm, Schmidt, and Arendt ; on the other hand, by Hansard, Nasse, a German manufacturer, and Leroy- Beaulieu. We have given opinions of our own only on one point. We thought it desirable to call attention not only to those discussions of the purchasing power of gold which rests only on the wholesale prices of the most important commodities, but also to another side of the question of the value of money. Here, also, consistently with the general character of our investigation, we have refrained from general discussions and have let the facts speak for themselves. Before presenting the general statistical statements and combinations in regard to changes in the level of prices, we communicate a series of trustworthy data in regard to the changes that took place during the years from 1851 to 1885 in the cost of average living, in the wages of labourers, in salaries, in rents of dwellings, in rents of land, &c. These indicate that in such matters the purchasing power of gold by no means has that tendency to rise which is observable in the wholesale prices of commodities. So far as regards the investigation of the changes in vhe level of prices, we have no longer given in this edition, with the fortaer detail, the tables published in England, and the index numbers connected with them, in order that we might give greater space than was possible in the first edition to the ascertainment of the actual average prices of important commodities according to the Ham- jjurg trade statistics. We have now given the average prices for one hundred and fourteen articles (adding, as a necessary supplement, to the hundred selected articles of the Hamburg statistics, fourteen English articles of export), and have given them not only for periods of several years, but also in detail for each year from 1861 to 1885, with the corresponding index numbers. The wish for such a completion of the statistics of prices has been urged from several sources, and the propriety of such a wish had to be admitted. We are by no mea/ns disposed to set aside the objections which can be brought forward against too implicit a reliance on the so-called index number.s (the per cents, of the comparative average prices of many commodities in different years or periods), yet we believe that in this presentation of the movement of the prices of one hundred and fourteen carefuiry and im- partially selected important commodities, the- method of index numbers supplies an approximately sound basis for conclusions as to general prices. In any case, this com- prehensive and clear presentation by the Hamburg Bureau of Trades Statistics is an important contribution to the understanding of the recent development of trade. Although our Materials, notwithstanding all the atten- tion and care devoted to their collection .and preparation, and notwithstanding their greater volume, will not satisfy even in the present enlarged edition all deman"ds, we may yet hope that they will be of permanent value -as a source of information in these discussions. We trust they may also serve for the easier procurement in the future of needed trustworthy statistical information. It will be a comparatively easy task to gather and .to u§e in better form, on the basis of these Materials, further more im- portant data, vvhich will serve to compile afid continue them. Contemporaneously with this volume, and based upon it, there will appear a separate sheet, entitled " Gi-aphic Charts on the Silver Question." In conclusion, we beg to express our .sincere thanks to those who have aided us in the friendliest manner by their many valuable communications. An. SoETREER. Gottingen, October 1, 1886. Ai>p. XVI. PART I.— PRODUCTION OF THE PRECIOUS METALS. General Statements of Gold and Silver Production in the Years 1493-1885. The following general statements are based on the volume entitled " Production of the Precious Metals, and Ratio " between Gold and Silver from the Discovery of America, " to the present Time," by Dr. Adolph Soetbeer, Gotha, 1879 4to, and on an essay by the same writer in the Jahr- biich'er fii'r National-Oekonomie und Statistik (new series. Vol II Jena, 1881), entitled "The Statistics of the Pre- cious Metals in 187G-1880." For the years since 1880 the most recent statements and estimates have been con- The statements of weight refer to kilograms of pure silver and pure gold. „ , j ■ , , In the statements of value the kilogram of gold is reckoned as equal to 2,790 marks (3,444| francs). The kilogram of silver was reckoned in the first edition of this work, on ■the usual plan, as equal to 180 marks (222f francs). In this reckoning the ratio 16J to 1, regarded for a long time as normal, was used. Strictly speaking, this reckoning was iustified only in the period from the beginning of this cen- tury till about the year 1870. Its application for the subsequent years was permissible so long as the average price of silver, after 1873, had not changed very much from the supposed normal price, and so long as the opinion was entertained in many quarters that the fall in the value of silver was a temporary phenomenon and that the former o 54648. ratio would soon re-appear. But after the depreciation of silver had again set in, and gone farther, in 1885, and the prospect for a so-called re-instatement of silver, or for the establishment of a double standard in civilized countries on the basis of the former French ratio, "had disappeared, it seemed necessary to abandon the uniform reckoning of the value of silver, and to undertake the_ reckoning with a consideration of the actual ratio to different periods. So far as the period from 1687 till 1886 is concerned there is little diflSculty in making such a reckoning, since, as will appear below, the average annual -ratio . for this period can be positively ascertained. On the other hand, in regard to the ratio during the period before 1687, we are compelled to use estimates, and therefore-the statement of the value of the silver product from 1493 to 1686 in terms of present gold coins (marks or francs) can be only an approximate one. But, however "great may- be the possibility of error in such a new calculation, for long periods in this early time, of the value of the silver-product, it must be admitted that it comes closer tojthe f^cts than the method which assumed the same ratio for all periods. In the statements of t'ne production" iu sitigie cbuntries, ores containing silver and gold, and exported, are not con- sidered, but the metals extracted from such ores are ascribed to the countries where the ores were treated. 146 KOYAL COMMISSION ON GOLD AND SlIiVBU ; Atp. XVI 1. Total Production of thk Precious Metals. Weight. Value. Periods. Gold Kg. Silver Kg. Proportion per Cent, Gold Thousand Marks. Silver Thousand Marks. Proportion per Cent. Gold and Silver Thousand Marks. 1 Kg. Silver Gold per cent. Silver per cent. Gold per cent. Silver per cent. calculated in Marks. Average 1493-1620 5,800 47,000 11.0 89,0 16,182 12,220 57,0 43,0 28,403 260 1621-1641 7,160 90,200 7,1 92,0 19,976 22,370 47,a 52,8 42,346 248 1646-1660 8,610 311,600 2,7 97,3 23,742 76,965 23,6 76,4 100,707 247 1661-1B80 6,849 299,600 2,2 .97,8 19,083 72,779 20,8 79,2 91,862 243 1681-1600 7,380 418,900 1., 98,3 20,590 98,860 17,2 82,8 119,460 236 1601-1620 8,520 422,900 2,0 98,0 23,771 96,421 19,8 80,2 120,192 228 1621-1640 8,300 393,600 2,1 97,9 23,167 78,326 22,8 77,2 > 101,483 199 1641-1660 8,770 366,300 2,3 97,7 24,468 70,330 25,8 74,2 94,798 192 1661-1680 9,260 337,000 2,7 97,3 26,835 62,682 29,2 70,8 88,517 186 1681-1700 10,765 841,900 3,1 96,9 30,034 63,693 32,1 67,9 93,627 186 1701-1720 12,820 356,600 3,5 96,5 35,768 65,076 35,5 64,5 100,843 183 1721-1740 19,080 431,200 4,2 95,8 63,233 79,772 40,0 60,0 133,006 186 1741-1760 24,610 633,146 4,» 96,0 68,662 100,764 40,5 59,5 169,426 189 1761-1780 20,705 652,740 3,1 96,9 67,767 124,021 31,8 68,2 181,788 190 1781-1800 17,790 879,060 2,0 98h, 49,634 162,626 23,4 76,6 213,260 185 1801-1810 17,778 894,150 1,9 98,1 49,600 160,063 23,7 76,3 209,653 179 1811-1820 11,446 540,770 2,1 97,9 31,932 97,339 24,7 75,3 129,271 180 1821-1830 14.216 460,660 3,0 97,0 39,663 81,519 32,7 67,3 121,182 177 1831-1840 20,289 596,460 3,3 96,7 56,606 105,672 34,0 66,1 162,178 177 1841-1860 64,769 780,415 6,0 93,4 152,777 137,353 62,7 47,3 290,130 176 1851-1856 199,388 886,115 18,4 81,6 556,308 160,387 77,6 22,4 716,695 181 1856-1860 201,760 904,990 18,2 81,8 662,899 164,709 77,4 22,6 727,608 182 1861-1865 186,057 1,101,150 14,1 85,6 616,326 199,308 72,1 27,9 715,034 181 1866-1S70 196,026 1,339,085 12,7 87,3 641,139 239,696 69,4 30,6 783,835 179 1871-1875 173,904 1,969,425 8,1 91,9 486,207 344,648 58,5 41,5 829,856 175 1876-1880 172,414 2,450,252 6,6 93,4 481,045 382,062 65,7 44,3 863,107 156 1881-1885 149,137 2,861,709 5.0 96,0 416,098 428,760 49,3 50,7 844,858 150 2. Detailed Statement oi? the PkOductiok of the Prbcious Metals, 1851-1885, by Weight, A. — Production o/ Oold, Periods and Tears. United States. Australasia. Russia. Mexico, Colombia, Brazil. Other Countries. Total. Estimate of the Master of the Mint, America, AVCH 1861-1856 ige of the Yea r». 881800 69,573 kg. 24,730 kg. 7,710 kg. 8,575 19&8 kg. 1866-1860 - 77,100 82,392 26,670 7,000 8,688 201,750 1861-1865 • 66,700 77,634 24,084 7,660 8,989 186,057 1866-1870 - 76,000 73,526 30,060 6,940 8,510 195,026 1871-1875 ■ 59,600 63,129 83,380 7,240 10,655 173,904 I 1876 n the Year 60,000 49,166 33,600 7,200 16,000 166,966 1877 • 70,300 45,045 41,000 7,100 16,000 179,446 171,463 1878 • 76,800 48,747 42,100 7,200 16,000 186,847 179,175 1879 * 68,300 43,307 42,600 7,100 16,000 167,307 163,676 1880 ■ 61,200 . 46,216 41,400 6,700 16,000 168,616 160,152 1881 • 52,200 46,664 38,600 6,600 16,000 158,864 165,016 1882 • 48,900 44,075 32,700 6,300 16.500 148,475 148,939 1883 • 46,140 40,705 35,800 6,400 16,500 144,645 141,733 1884 • 46,343 42,400 82,908 8,000 16,600 146,161 143.381 1886 ■ 47,850 APPENDIX. 147 B. — Production of Silver, App. XVI. Periods and Years. Mexico. Peru, Bolivia, Chile. United States. Germany. Other Countries, Total. Estimate o£ the Master of the Mint, America. Avers 1861-1865 ■ ige of the Yea rs 46^100 218,600 kg. 8,800 kg. 48,960 kg. 144,155 kg. 886,115 kg. 1856-1860 ■ 447,800 190,'100 6,200 61,510 199,080 904,990 1861-1865 • 473,000 191,100 174,000 68,320 194,730 1,101,150 1866-1870 - 520,900 229,800 301,000 89,125 198,260 1,339,085 1871-1875 - 001,800 374,700 664,800 143,080 285,046 1,969,425 ] 1876 n the Year 601,000 850,000 933,000 139,779 800,000 2,323,779 1877 • 634,000 850,000 957,000 147,612 800,000 • 2,388,612 2,174,610 1878 - 644,000 860,000 1,089,876 167,988 800,000 2,551,364 2,282,573 1879 . 689,000 860,000 981,000 177,507 300,000 2,607,607 2,313,731 1880 ■ 701,000 360,000 942,987 186,011 300,000 2,479,998 2,326,941 1881 . 721,000 850,000 1,034,649 186,990 300,000 2,592,639 2,458,322 1882 - 788,000 390,000 1,126,083 214,982 300,000 2,769,065 2,690,573 188S • 739,000 510,000 1,111,457 235,063 300,000 2,895,620 2,812,972 1884 . 786,000 460,000 1,174,205 2.18,117 300,000 2,957,323 2,770,610 1885 • 1,241,000 278,000 (340,000) According to the preceding figures, with estimate of the quantity for 1885, the total production of the precious metals from the close of the fifteenth century to the dis- covery of the Californian and Australian gold fields, and thence to the year 1885, has heen : Gold. 1493 to 1850 (in 358 years) 1861 to 1885 (in 35 years) Total kg. 4,752,070 (42,.%) 6,383,388 (57,3%) 11,135,458 (100,0%) Silver. 1493 to 1860 (in 358 years) 1851 to 1885 (in 35 years) - Total kg. 149,826,750 (72„ %) 67,663,631 (27,8%) 207,390,381 (100,0%) The proportion hy weight of gold and silver production in these great periods has been : 1493 to 1860, gold 3,i %; silver 96,9 %• 1861 to 1885 10,0 7o 90,0%' 3. Detailed Statements of thbPboduction of the Precious MetalSj 1851-1885, BY Value. A Production of Gold, Perioas and Years. United States. Australasia. Bussia. Mexico, Colombia, Brazil. Other Countries. Total. Estimate of the Master of the Mint, America. Average of the Ye 1851-1865 - irs Thousand Marks. 247,762 Thousand Marks. 194,124 Thousand Marks. 68,997 Thousand Marks. 21,611 Thousand Marks. 23,924 Thousand Marks. 556,308 Thousand Dollars. 1866-1860 - 215,109 229,S9t 74,130 19,530 24,240 562,899 1861-1865 - 186,093 216.617 67,194 21,343 26,079 516,326 1866-1870 - 212,040 205,153 83,840 19,363 28,743 544,139 1871-1875 - 166,006 176,146 93,130 20,200 29,727 485,207 In the Year 1876 167,«I0 187,165 93,744 20,088 44,640 463,027 1877 196,137 125,684 114,390 19,809 44,640 500,660 113,947 1878 214,272 122,063 117,469 20,088 44,640 618,622 119,023 1879 162,667 120,837 118,854 19,809 44,640 466,797 108,736 • 1880 161,218 126,161 115,606 18,693 44,640 456,218 106,887 1881 145,638 127,134 107,415 18,414 44,640 443,241 103,023 1882 186,431 122,981 91,233 17,577 46,085 414,257 98,985 1883 126,941 113,676 99.882 17,856 46,035 403,289 94,197 1884 129,297 118,296 91,813 22,320 46,035 407,761 95,293 1885 133,501 T 2 148 EOYAL COMMISSION ON GOLD AND SILVER: App. XVI. B. — Production of Silver. Periods and Years. Mexico. Peru, Bolivia, Chile. United States. Germany. Other Countries. Total. Estimate of the Master of the Mint, America. Average of the Tears 1851-1865 .... Thousand Marks. 84,364 Thousand Marks. 39,667 Thousand Marks. 1,502 Thousand Marks. 8,862 Thousand Marks. 26,092 Thousand Marks. 160,387 Thousand Dollars. 1866-1860 . - . - 81,500 34,653 1,128 11,195 36,233 - 164,709 ^§81-1865 .... 85,613 34,589 31,494 12,366 35,246 199,308 . 1866-1870 .... 93,241 41,134 63,879 16,968 36,489 239,696 1871-1875 .... 105,316 65,672 98,840 25,089 49,883 - 344,649 . In tlio Year 1876 .... M,357 64,950 146,481 21,946 47,100 364,833 1877 .... 102,708 66,700 166,034 23,913 48,600 - 386,9.56 - 81,041 1878 .... 99,820 64,260 168,863 26,038 46,600 395,461 - 84,238 1879 .... 106,248 53,200 149,112 26,981 46,600 - 381,141 -83,735 1880 .... 107,954 63,900 145,220 28,646 4«,200 381,920 . 85,32] 1881 .... 110,313 53,650 158,301 28,609 45,900 896,673 102,168 1882 .... 112,914 69,670 172,291 32,892 46,900 423,667 . 111,822 1883 .... 110,850 76,600 166,719 36.269 4.5,000 - 434,328 316,923 1884, .... 117,760 67,500 176,130 37,218 45,000 4ft3,698 116,148 1885 .... - - 178,704 40,032 (4S,960) - - According to value, on the above figures, the total production of the precious metals for the periods from 1493- 1850 and from 1851-1885 has been : Gold. 1493 to IS-W (in 358 years) 1851 to 1885 (in 35 years) Total - Silver. 1493 to 18.50 (in 358 years) 1851 to 1885 (in 35 years) Total . Million marks. - 13,258,, (42,,%) - 17,810 ,1 (,'-.7„%) . 31,068,3 (1<»0,„ %) Million marks. - 29,43,3,s (75,,,%) - 9,597,9 (24,,%) The proportion between gold and silver production was, by value : 1493 to 1850, gold 31,^ %, and silver 68,„ %. 1851 to 1885 „ 65,0% „ 35,^ %. If the value of the silver product were calculated, on the plan formerly in use, by considering the ratio to have been 155-1 throughout (that is, considering the kilogram of silver to have been worth 180 marks throughout), the proportions would be : Gold. - 39,031,; (100,0 %) 1493 to 1860 (in 358 'years) 1861 to 1885 (in 35 years) Silver. 1493 to 1850 (in 358 years) 1851 to 1885 (m 35 years) Gold and Silver toe/ether. 1493 to 1850 (in 368 years) - 1851 to 1885 (in 35 years) 33,0 /o 63,2 % 67,0 % 36,s % - 100,0% - 100,0% Notes on the Tables of the Production of the Precious Metals. In order to prevent frequent misunderstandings in regard to the character of the statistics of the precious metals, and an incorrect judgment of the preceding tables, it seems not superfluous" to bring certain general remarks to the reader's attention. One ought neither to over.estimate nor to under.estimate these statistics — on the one hand, not to demand more from them than, Vifith the best wishes of their authors, they can possibly give, and, on the other hand, not to throw overboard their results with exaggerated mis- trust, because of their inevitable gaps and imperfections. The need of information and of tables in regard to the production and use of gold and silver, in regard to the movement of precious metals from country to country, in regard to the presumable supply of gold and silver in the world at large and in the different countries at different times, and in regard to other similar matters, has been constantly and strongly felt in commercial nations, from the discovery of America to the present time. It has led to more or less complete and important complications. The traditional position of the precious metals, which have been assumed without question to form the universal measure of value and medium of exchange, and the wide, spread and deep.rooted opinion that it was above all the possession of abundant supjjlies of them that promoted and secured the welfare of a country, inevitably caused great importance to be attached and general attention to be given to these statistical statements, rough and arbitrary as they may in part have been. From the' beginning there has been a steady tendency to exaggeration, which some- times has verged on recklessness. We need only call attention to the erroneous statepients, first corrected by Ranke, about the enormous sums of the precious metals which were supposed to liave come to Europe from the New World during the very first decades after the discovery of America, and to the curious notions about tiie early product of the Saxon silver mines. The latter are worth mentioning, not only as a matter of curiosity, l)ut also as a proof how far exaggeration can go. Magister Albinus, citing authentic records, and moreover the authority of Philip Melanchthon, "a trustworthy man, who had no liking wliatsoever for things superficial," assures us in all earnestness that from 1474 till the year 1550-, that is, in 76 years, there had been got from tjie mines of Schneeberg the sum of 12,335,520,483 heavy dollars (unciales). that is to say, more than the value of 123,356 tons of gold ; and that, in addition, the princes had received in tithes $2,055,920,080, and the same sum for seignorage ; so that the total product of the silver mines of Schneeberg had been m that period equal to 164,473 tons of gold. The quantities so reported by Magister Albinus, reckoned on the metrio system, are equivalent to 425,000,000 kilograms of silver. In fact, however, the annual product of the silver mines of Schneeberg, according to the specific accounts sent to us for the 76 years from 1474 to 1550 amounts to no more than 1,263 kilograms, whereas the above naive exaggeration would indicate an average annual product of 6,600,000 kilograms, or about double the total annual product of silver in the whole world at the nresent time. ... ' Although great exaggerations, such as those of former times no longer occur, there is still much reason for mis- trusting statements of gold and silver production so long APPENDIX. 149 as trustworthy positive authority is not cited. As a rule, the tendency to over-statement is much more common and more tenacious than that to under-statement, especially when new discoveries or unknown countries are spoken of. The presumption of an under-statement exists only where the statistics of the production of the precious metals come from the statements based on taxes, and where the pro- ducers or exporters have an immediate interest to omit a part of the product and thereby escape taxation. In countries where there is a high export tax on the precious metals the declared export, and the production calculated from it, may well be below the actual production. On the other hand, care must be taken not to make too great a statistical allowance for frauds of this kind, as seems to have been the case in the former estimates of the large production of the precious metals in Spanish America. Every competent person who considers the statistics of the production of the precious metals in former times, must admit that a great degree of uncertainty remains even in statements brought together with great care and conscientiousness, and with repeated checks. Many figures rest only on rough estimates, with a possibility of wide errors, and others rest simply on guesses, based upon very little and very sUght evidence; but unless one gives up entirely the task of getting complete and connected statistics of the precious metals, such estimates and guesses are indispensable. It is to be hoped that renewed investigations may succeed in finding further positive statistical material in the archives. Nothing is achieved by a merely negative criticism, which sets forth at great length that all statistics of the precious metals for former times are quite arbitrary and useless. On the other hand, criticism which shows, for important estimates, the greater probability of a high or of a low figure is so much the more welcome. Professor Lexis says with truth that in the statistics of the precious metals estimates in place of positive statements unfortunately must always play a prominent part, but that it is nevertheless possible hy care and method to prevent them from being simply guesses. We have begun, in the present publication, with the estimates which we put forward eight years ago, with all reservations, of the production of the precious metals from 1493 to 1850 ; estimates which since have been reprinted in many other publications. This has been done by no means because a revision of these estimates appears superfluous, or because a change might not he possible far one or another statement or combination of statements. But for the purpose of the present work we believe that it was not only permissible, but even advisable, to repeat them with- out other change than resulted from the new method of reckoning the value of silver, since we still consider our former estimates as upon the whole accurate. Particular changes in matters of comparatively little note, even though they would bring us perhaps nearer to probahle truth, were of no great importance for our present purpose. More- over, up to the present time, we have seen but one careful detailed examination of our estimates for the earlier period. This is the article Contributions to the Statistics of the Precious Metals, by Professor Lexis) in the Jahrbiicher fiir National-Oekonomie, Vol. XXXIV., page 361). We reprint here, for comparison with our statements, the results of the independent investigations of Professor Lexis, according to which the Mexican and South American production of the precious metals should be stated up to 1800 as follows : — Periods. Yearly Average. 1493—1600 1601—1700 1701—1800 kg. 330,000 620,000 1,570,000 ►Silver. kg. 13,100,000 28,600,000 48,500,000 This yields a total gold product of 2,420,000 kilograms of gold, and 90,200,000 kilograms of silver, whereas our statements yield for the Mexican and South American pro- duction till the close of the 18th century 2,490,000 kilo- grams gold, and 101,400,000 kilograms silver. Our higher estimate of the American silver product arose through the fact that we took for the Peruvian mines a larger amount than Lexis considered admissible. It is to be hoped that the Spanish and Sooth American archives will in future give further positive data, or at least information in regard to the earlier American production . It will then be time to undertake a thorough revision of our tables, and to replace them with new ones. For the present, and for the purpose of this publication, it seems (juite useless, in view of the inevitable uncertainty of all estimates, to make changes which are comparatively un- important in relation to the totals. For the production of the precious metals from 1851 till 1875 we have also retained our previous figures, since there seems to be no occasion for any essential change. But it may he mentioned that our estimates, as has been already stated in our earlier larger work, stand higher almost throughout than those which based on tables of '3 _• Hector Hay, are usually given in English periodicals. For the sake of completeness we give a summary compari- son of both estimates for the whole period from 1851 to 1875. APP. XVI. Country of Produc- tion. Gold. Silver. My Estimate. Hay's Estimate. My Estimate. Hay's Estimate. United States Australia Russia Mexico and South America. Other Countries 1,840,500 1,812,000 694,080 231,936 177,860 kg. 1,776,600 1,679,700 009,100 163,400 91,600 kg. 5,271,500 397,790 18,570,600 6,763,745 6,118,000 ■ 363,000 16,330,000 6,676,000 Total - 4,766,365 4,309,300 31,003,636 28,376,000 The difference is to be explained principally by the fact that Sir Hector Hay puts too low an estimate on the production in South America, and leaves almost entirely out of consideration the production in countries not specifically named, which latter, all told, forms no unim- portant amount. The two estimates, while differing in other respects, yet agree in that both make the proportion of the production of gold to that of silver about the same. Variations as considerable as those that appear in the different compilations in regard to the production of the precious metals before 1875 can no longer appear for the subsequent period. Since that time, ivitli the depreciation of silver and the uncertainty as to future standards of value, the practical interest in the statistics of the_precious metals has become immensely greater. Variations in the different estimates mevitahly continue. But as a rule they are easily explained, and balance each other on the average of several years. Very meritorious work has been done since 1879 on the recent statiistics of the precious metals by the Directors of the Mint of the United States. Messrs. Horatio C. Burchard and James P. Kimball have published in their annual reports a mass of information, not only in regard to their own country, but also, on the basis ot consular reports, in regard to other countries. We turn now to the statistics of the production of the precious metals since the year 187t> in the individual countries of most importance, beginning with that gfeat country which, in tliis respect, has in recent years un- doubtedly taken the first place, the United States. Par- ticular attention is given to this branch of statistics in that country, especially in the annual reports upon the Statistics of the Production of the Precious Metals in the United States, published since 1881, under supervision of the Directors of the Mint. For those years for which such reports exist, statistical statements differing from them may of course be set aside. That other statements still exist is explained by the fact that immediately at the beginning of each year Mr. Valentine, the superintendent of the great express firm of Wells, Fargo & Co., prepares a preliminary statement of the production of the precious metals in the West of the United States, which is widely published, and accepted up to the appearance of the exact official statements. It seems necessary to take note of the manner in which the gold and silver product of the Union divides itself from year to year among the different States and Territories, for extraordinary changes and shiftings take place. The energy, the technical skill, and the recklessness of the persons engaged in mining and smelting, are such that productive mines are often entirely exhausted within a short space of time, and the population employed in them turns f other, "often distant mining disti'icts. im isoyAx, ooMMissiow on goi^p and silvee: Apt. XVI. 1881. 1882. 1883. 1884. - Gold. Silver. Gold. Silver. Gold. Silver. Gold. Silver. Alaska - Dollars. 16,000 Dollars, Dollars. 160,000 Dollars. Dollars. 300,000 Dollars. Dollars. 200,000 Dollars. Arizona - 1,060,000 7,300,000 1,066,000 7,500,000 950,000 5,200,000 930,000 4,600,000 California 18,200.000 760,000 16,800,000 845,000 14,120,000 1,460,000 13,600,000 3,000,000 Colorado - 3,300,000 17,160,000 3,360,000 16,600,000 4,100,000 17,370,000 4,260,000 16,000,000 Dakota ■ 4,000,000 70,000 3,300,000 176,000 3,200,000 160,000 3,300,000 160,000 Georgia - 125,000 - 260,000 - 199,000 1,000 137,000 - Idaho 1,700,000 1,300,000 1,600,000 2,000,000 1,400,000 2,100,000 1,250,000 2,720,000 Montana - 2,330,000 2,630,000 2,650,000 4,370,000 1,800,000 6,000,000 2,170,000 7,000,000 Nevada - 2,260,000 7,060,000 2,000,000 6,750,000 2,520,000 5,430,000 3,600,000 5,600,000 New Mexico 186,000 280,000 150,000 1,800,000 280,000 2,846,000 300,000 3,000,000 North Carolina - 115,000 - 190,000 25,000 167,000 3,000 157,000 3,600 Oregon • 1,100,000 60,000 830,000 36,000 660,000 20,000 660,000 20,000 South Carolina - 35,000 - 25,000 - 66,600 500 57,000 600 Utah M6,000 6,400,000 190,000 6,800,000 140,000 6,620,000 120,000 6,800,000 Virginia • 10,000 - 15,000 - 8,000 - 2,000 — • Washington 120,000 - 120,000 - 80,000 600 85,000 1,000 Wyoming • 5,000 - 6,000 - 4,000 - G,000 — Other States and Territories - 5,000 — — — 17,600 - 76,000 6,000 Total • 3*,700,000 43,000,000 32,500,000 46,800,000 30,000,000 46,200,000 30,800,000 48,800,000 Eeduced to metric weights, the production of the precious metals of the United States, as given in the statistical abstract for 1885, was as follows : — Periods and Years. Gold. Silver. 1851-66 Yearly average. kg, 88,500 kg. 1,200 1866-60 . 76,800 1,900 1861-70 71,100 241,800 1871-80 59,600 870,600 1881 During Years 62,000 1,032,000 1882 . 48,800 1,123,200 1883 46,000 1,108,800 1884 ■ ■ ■ ' ■ 46,200 1.171,200 For the year 1885 the gold product has been ascertained to be 31,800,000 dollars=47,850 kilograms, and the silver product to be 51,600,000 dollars= 1,24 1,000 kilograms. It would obviously carry us too far to go further into the special conditions of the production of the precious metals in the United States. In regard to them reference may be made to the already mentioned comprehensive reports of the Directors of the Mint. But, in view of the extraordinary and decisive importance of this production, we cannot refrain from giving extracts from general opinions put forth recently by certain careful observers. Professor Lexis, in his essay on "The Question of Standards and the Conditions of the Production of the Precious Metals" (Schmoller's Jabrbiioher, X. 1,188") "If one considers as a whole the conditions under which gold is produced in the United States, one must admit_ that the discovery of alluvial deposits of the extent and richness of those formerly discovered in California is no longer to be expected. Gold-washing will contribute less and less to the yearly product, even though from time to time new deposits may be found which will bring about a retardation of the rate of decrease. But this alluvial gold already forms but a comparatively small part of the total product Much larger is the contribution which comes from the huge gravel deposits of older times, and the product from this source can undoubtedly be main- tamed at its present height for many decades, especially when the external difficulties are removed which have at present arisen in CaHfornia from reckless hydraulic mining The most permanent supply of gold, however, is to be expected from quartz mining ; and at the same time all the indications point to a gradual and considerable rise in the product from this source. Already it is possible to use ores of low grade, which formerly were not considered worth treating. It is endeavoured more particularly by better metallurgy to get rid of the loss which so far as arisen through the fact that the gold contained in iron pyrites, the so-called nisti/ gold, cannot be secured. It may therefore be assumed that the production of gold in the United States has at the present time reached a point at which it will maintain itself on the average for many years, and that the annual yield during the next generation IS hardly likely to be less than 110 to 120 million marks." In regard to the production of silver in the United States, it is said in the same essay : f 'l?^®r.°®i''*^o^®P°'^^ ^^^^ '* evident that the richness of the Pacific States and Territories in silver is practically inexhaustible ; that it depends only on the development of the raiboad system, on the progress of technical art, and on the application of labour and capital, how far the annual product shall be increased. The effect of the low price of silver is chiefly this, that many low-grade ores are not now treated, but are piled up in the hope of the discovery of cheaper methods of treating them or of higher prices of silver. New deposits are constantly discovered, which yield a profit even at the present price of silver and more than fill out the gaps in other places. Ihe Amencan reports note especially the increasing importance which California has gained as a producer of silver, through the discoveries in San Bernardino county. Interest will also be taken in an essay by Dr E Rever which appea,red in the January number for 1886 of the Zeitschrift fur Berg-, Iliitten- und Salinen-Wesen im Preussischen Staate under the title of " Gold Mining in California ™ ,'^h"=h the economic side of the matter is considered The author has personally studied the situa- tion in California. We quote his concluding sentences :- If we compare the total production of gold in Cali- ^rn^'^'t *i' l"'"-^'''- °^ ^°*'^«"' ^« ge* interesting fiOOOo'fn rnnrinn '^'''""'S °^ ^''" '^^'^^^ 1850-60, from wasb^n., of r Vf "•" '^X'^ employed in the mines and washings of Califorma. One man produced annually no more than between 2,000 and 4,000 marks, which meant at daily wages between 16 to .S2 marks, a large defici™ In the middle of the decade, from 1860-70, 43foOO men'were employed (of whom 7,000 were employed in quirte r/rif 'ot'i*°^''>-'' ^'°t'i only500,000,b00Ss ot gold. Quartz mimng yielded at that time nearly 4,000 marks per year per man, the washings correspondingly less, with daily wages of from 10 to^l2 marks aS there was an industrial loss. '"arss. Again divid^e?X tt' '^rr'^r'^ "^'^ ^^^ statements as to dmdends, from which it appears that of severalhundred quartz mines hardly a dozen are profitable. In the APPENDIX. 151 washings matters are no better ; even though the dividends in particular cases are large, they by no means cover the deficit of all the unprofitable undertakings. In fact, the production of gold here, as in Australia, has always yielded a net loss. This may be explained as follows. A few dozen mines produce the great mass of gold. They make large profits and determine the price. Their success attracts capital without end to similar undertakings ; these are given up after a while, and the money is returned to other really productive branches of industry. But the temptation from the fortunate gold producers continues, and causes new capital constantly to rush to its destruction — ^the same phenomenon that is seen in games of chance. A few win a great deal; hundreds lose all they have. The business, on the whole, is a losing one. Everybody knows it, yet everyone stakes his venture in the hope of winning the great prize. For that reason the production of gold throughout the world has always been, on the whole, unprofitable, and gold has been an article which was sold below cost price. This state of things vriU continue so long as the production of gold is not regulated by the State, or entirely carried on by the State, at least in the most important producing countries. The total production of gold in California maintained itself in the years after 1850, as a rule, at 200,000,000 marks per year. In the beginnmg of the Sixties it fell rapidly to 100,000,000 marks, and in recent times to less than 50,000,000 marks. In the first years the gold was gained almost entirely out of ordinary washings. In the beginning of the Fifties a production from quartz appeared of from 40,000,000 to 60,000,000 marks. Later, the great mass of gold was obtained by hydrauhc mining. The production of the Seventies has been obtained about half from washings and half from mines. " The decreasing gold production of California was sup- plem^ented in the Sixties by that of other American States (Comstock, &c.). In recent times these sources also are being rapidly exhausted. Here, as in Australia, the pro- duction of gold is marked by a lack of permanence. This has always been the case, and is explained by the easy exhaustion of the alluvial deposits, and the small depth at which veins are profitable. In other ' countries, the same phenomenon has shown itself in previous centuries, but under the conditions of earlier times, when methods were more primitive, there was a longer period before exhaustion sets in. In this respect gold differs, essentially from the less exhaustible silver." It is apparent from these quotations how much the views of attentive observers differ as to the continuance of an abundant supply of gold, and how difiicult it is to secure a correct opinion. The final result must turn on the discovery of new and rich gold fields, and on the progress of mining skill. In regard to the production of gold in Australasia, by which name we designate, following the example of the English, Australia itself (comprising the colonies of New South Wales, Victoria-, Queensland, and West Australia), Tasmania, and New Zealand, different statements vary very much for the difierent years. Not unfrecfuently the gold production, as stated by the mining authorities for various years, is later admitted to be incorrect, and other figures are substituted. If, however, these corrections are taken into account and the averages of several years are taken, the variations in the main balance each other. The total declared export of gold from Australia, deducting the intercolonial export, was as follows :— App. XVI. 1876 - 1877 - 1878 - 1879 - 1880 - 1881 - 1882 - 1883 - £ kg. . 5,793,374 = 42,400 - 7,296,868 == 53,400 - 5,667,084 — 40,800 - 2,403,212 = 17,600 - 4,170,749 = 30,500 - 6,461,388 = 47,300 - 5,087,625 = 37,300 - 5,180,741 = 37,900 The total for the eight years from 1876 to 1883 was 41,96O,O0OZ., equal to 307,200 kilograms, an average of 38,400 kilograms per year. To this amount some addition must be made on account of the gold retained for local use, before we could estimate the total gold product of the Australian colonies. In the years from 1856 to 1860 the corresponding gold, export from Australia was on the average 11,424,000^., equal to about 83,000 kilograms. The preceding data we have repeated in order to show in what manner the statements, in the first edition, of the gold product in Australia were made up. We are now, however, in a position to give a full statement of this production since 1851, that is, from the beginning of the production of gold up to 1884, inclusive. This statement is entitled to take the place of previous calculations and estimates. In the sixteenth annual report, for the year 1886, of the British Master of the Mint, th^e is an Appendix E.), entitled " Estimated production of gold and silver in Australia and New Zealand from the earliest records obtainable to the year 1884, inclusive. Tabulated from returns kindly furnished by the Government of each colony." This statement was prepared by the Master of the Mint at Melbourne, Mr. George Anderson, and was sent with the letter of introduction to the Master of the Mint ait London, Mr. C. W. Fremantle, on the 9th of March 1885. In the original table there is a column for the colony of West Australia, but no figures are given in that column, it being remarked, that the production there, h nominal. For this reason we hai/e omitted the column' According to this statement the production was as follows : — Gold Production IN Australasia. Year. New South Wales., New Zealand. Queensland. South Australia. Tasmania. Victoria. Total. Ounces. Oiuiees. Ounces. Ounces. Ounces. Ounces. Ounces. kg. 1851 .... 1«,120 — 212,899 367,019 10,179 1862 .... 818,761 « .— — .— - 2,286,635 3,105,286 88,632 1853 .... 648,052 — — — — 2,741,098 3,292,150 93,859 186.1 . . - - 237,910 — — — — 2,218,483 2,466,393 70,032 1856 . . . - 171,.367 — — — — 2,819,288 2,990,655 85,264 1866 . . - - 184,600 — — — — 3,053,741 3,238,344 92,325 1857 .... 175,949 10,437 — . — — 2,830,213 3,016,599 86,003 1858 . - - - 286,798 13,634 .— — — 2,696,231 2,896,563 82,681 1869 .... 329,363 7,336 — — — 2,348,703 2,685,402 76,561 1860 . . - - 384,053 4,538 — — — 2,224,069 2,612,660 71,187 18G1 . . - ■ 466,685 1194,031 (50,000) (60,000) — _ 2,085,173 2,744,889 78,267 1862 - - ■ ■ 640,622 410,862 — ~ 1,730,201 2,831,685 80,731 1863 . - . - 466,111 628,450 100,000) (100,000) 100,000) — — 1,694,819 2,889,380 82,370 1864 . . - - 340,267 480,171 — — 1,622,447 2,542,885 72,198 1865 . - - - 320,316 674,674 — — 1,611,564 2,606,414 71,310 1866 . . - - 290,014 736,376 150,000) — 348 1,646,918 2,722,686 77,621 1867 . . . - 271,886 686,905 150,000) — 1,363 1,601,446 2,611,600 74,467 1868 - " " " 255,662 637,474 160,000) — 692 1,684,918 2,728,746 77,797 1869 . . - - 261,491 614,281 (160,000) — i 137 1,611,756 2,660,666 73,001 1870 . . . - 240,868 644,880 180,000) — 964 1,304,301 2,271,006 64,746 1871 . . . - 323,609 730,029 180,000) (180,000) _ 6,006 1,368,912 2,608,685 74,371 1872 . . . - 425,129 446,370 2,494 6,969 1,331,377 2,391,339 68,177 1873 . . . - 361,784 505,337 200,000) 98 4,661 1,170,397 2,212,277 63,927 1874 .... 270,823 376,388 (200,000) 8,351 4,650 1,097,613 1,967,865 66,819 1875 . - - - 230,883 356,322 (200,000) 13,742 3,010 1,068,417 1,871,374 53,353 1876 . . - ■ 167,412 322,016 250,000) 9,857 11,107 963,760 1,724,152 49,156 1877 . . . - 124,111 371,685 ■ 266,916) 11,811 5,777 809,653 1,579,953 46,045 1878 . . - - 119,665 310,486 1310,247 10,745 25,249 758,040 1,534,132 48,747 1879 . . . - 109,660 287,464 283,556 14.250 60,165 758,947 1,619,022 43,307 1880 . . . - 118,600 305,248 267,136 13,245 52,695 829,121 1,686,945 45,215 1881 .... 149,627 270,561 270,945 16,975 66,693 833,378 1,698,179 46,664 1882 . - - - 140,469 251,204 224,893 15,668 49,122 864,610 1,615,966 44,075 1883 - - - - 12,3,806 248,374 212,783 15,938 46,577 780,263 1,127,731 40,705 1881 . . . - 107,199 229,946 307,804 21,464 42,339 778,618 1,187,360 42,405 9,596,643 10,552,279 4,629,280 154,628 878,413 53,023,986 78,235,227 .2,230,489 ROYAL COMMISSIOTf ON GOLD AND SILVER : 152 Arp. XVI. Professor Lexis estimates the yield of gold in Australia _: (apart from the production in North Australia) as fol- lows : — For 1882— at 1,566,757 ounces, or 125,341,000 marks. 1883— at 1,446,930 „ 115,754,000 „ „ 1884-at 1,507,283 „ 120,583,000 „ He adds : ' ' From 500,000 to 550,000 ounces are now produced from alluvial deposits, and between 950,000 and 1,000,000 ounces from quartz mines. In the first class the official statistics place hydraulic and other mines in the older deposits, which are likely to become more numerous m the tuture and to yield for a period without visible limit a consider- able amount of gold. In the same way quartz mming is capable of increasing development, as the settlement ot the country progresses and the normal growth of popula- tion and the increased railroads takes place. Metallurgic improvements will, moreover, render it possible to secure from the ores a considerably higher iier cent, of gold than was formerly possible. It is, therefore, not optimistic if an annual production of from 100,000,000 to_^110,000,000 marks is expected from the Australian mines." For the year 1885 complete reports of the production ot o-old in Australasia are not yet at hand. In Victoria the production, according to official reports, was 736,21s ounces, against 778,617 ounces in the year 1884; but this decrease may be covered by an increased yield in Uueens- land Here, for instance, the gold field of Charters Towers yielded in 1885 134,650 ounces, as against 106,286 ounces in 1884, and, as the other reports from this colony are also favourable, we may estimate the gold production in Queensland for 1885 at about 340,000 ounces. New gold fields have been recently discovered in West Australia, at Kimberley, in the north-western part of the colony, which are said to be rich in alluvial gold. For the present they are not easily accessible, and up to date (August 1886) no considerable yield from them has been secured. "o ., • There has been, practically, no production of silver m Australia up to the present. What silver has been obtained there has been derived by separation from gold, Mr. Anderson, in the report mentioned above, has given sepa- rate figures for the production of silver since 1863 in New South Wales, Victoria, and New Zealand, of which the totals are as follows : — Total. 1863-70 _ 81,159 ounces 1871-75 , - 597,712 „ 1876-80 . . 662,020 „ 1881 - . - 97,096 „ 1882 - - - 64,655 „ 1883 - . - 116,012 „ 1884 - - - 145,644 „ so-called " Sehlich-gold," or " Legatur " gold, such as Is turned in by the producers. , . j.. Below we give, first, the statements in regard to the earlier developments of Russian gold production, which J von Bock puplished in his statement of Russian pro- duction for the seven quinquennial periods between 1815 and 1849 Then, for the individual years from 18.jO to 1871 we give the figures of Professor Lexis m his essay on the precious metals in the foreign trade of Russia, printed in the "Tubinger Zeitschrift fiir die Gesammte Staatswissenschaft, 1878. Lastly, for the years from 1872 to 1875, we give the official statements as sent to us direct from St. Petersburg :— Average. 1815-19 1820-24 1825-29 1830-34 1836-39 1840-44 1845-49 Years. 1850 - 1861 - 1852 - 1853 - 1854 - 1856 - 1856 - 1857 - 1858 - 18.59 1860 - 1861 1862 - 1863 - 1864 - 1865 - 1866 - 1867 - 1868 1869 1870 - 1871 - 1872 - 1873 - 1874 - 1875 - Based on these, and on certain other statements, was the following estimate, already published by us in earlier writings, of the gold production of Russia from 1801 to 1875 :— Pud. Pfund 15 32 82 21 266 9 373 2(1 443 12 926 37 1,689 31 1,4,54 1,474 — 1,367 — 1,463 — 1,596 — 1,649 — . 1,655 — 1,734 — 1,688 — 1,542 — 1,491 — 1,456 — 1,461 — 1,460 — 1,398 — 1,576 — 1,659 — 1,650 — 1,711 — 2,007 — 2.157 — 2,400 — 2,308 9 2,024 39 2,028 5 1,996 7 On the average of the four years, 1881-84, this pro- duction of silver has been only 106,862 ounces per year, equal to about 3,000 kilograms fine. In the years 1883 and 1884 there were exported from Queensland silver and lead of the value of 101,519/. The mining of silver in Queensland, as well as in New South Wales, seems to have begun on a larger scale only in 1885-86, at Silver Fields, in North Queensland, at Sunny Corners, Silverton, in the Barrier Ranges, &c. Whether the large expectations enter- tained ill regard to these new silver mines will be realised remains to be seen. It must, in conclusion, be said that the Chinese employed in the alluvial mines, especially in Queensland, carry to China a large part of the gold gained by them without declaring it. This was formerly the case in California also. How large this exportation of gold by the Chinese may be is difficult to estimate ; but it is certain that it does not appear in the official statistics, and that the sum total cannot be inconsiderable. In regard to the production of gold in Russia, it is not to be expected that exact statements, corresponding with each other, should exist, even if we look aside from the amounts fraudulently withheld from publication. The gold producers in Russia have always been obliged to turn over the gold produced by them to the authorities at fixed prices. For some time these purchases have been met by bills drawn at six months date on the Imperial Mint at St. Petersburg. On the whole, there is, in essentials, an agreement between the different official statements of the yield of gold in Russia ; but if the figures for individual years are considered, more or less considerable discrepancies appear. All statements are said to rest on the official data. The differences may in pai-t be explained by the fact that some statements refer to gold fine, that others refer to standard gold m fine), while still others refer to the Kg. M. 1801-1810 - 165 = 460,000 1811-1820 - 315 = 879,000 1821-1830 - - 3,375 = 9,416,000 1831-1840 - - 7,050 =: 19,669,000 1841-1850 - - 22,515 = 62,817,000 1861-1855 - - 24,730 = 68,997,000 1856-1860 - - 26,570 = 74,130,000 1861-1865 - - 24,085 = 67,197,000 1866-1870 - - 30,050 = 83,839,000 1871-1875 - - 33,380 = 93,180,000 There seems to be no reasons for attempting to change these estimates ; but it should he said that the production of gold in Russia was probably considerably larger than indicated by the official statements, especially in earlier times, when there was a not inconsiderable tax on- the gold produced on private account. Our estimate of the Russian gold production from 1876 to 1885 has already been given above in our general table. We add at this point only such other official statements as have come to hand. In the " Russian Review," 1883, the yield of gold in Russia for the years 1876 to 1881 is given as follows by Striedter : — ■ Pud. Pounds. Solotnilt. KS. 1876 - 3,054 8 48 =3.3,(;t( 1877 - 2,B03 6 57 - =40,9SC 1878 - 2,r,73 . 4 33 = i2,i:fj 1879 - 2,G31 IIU 53 = 43.109 1880 - 2,641 29 91 = 13.273 APPENDIX, 153 Dols. 1876 - 22,362,309 1877 - 27,2-10,081 1878 - 28,000,624 1879 - 28,650,449 1880 - 28,759,860 1881 - 24,431,048 1882 - 23,867,935 1884 - 2,009 pud, 10 pfund In the Statistical and other Scientific Contributions from Russia, fifteenth year, 1882, K. Skalkowsky men- tions that at the close of 1879 the number of private gold mines in Eastern Siberia was 1,622, in Western Siberia 291, in the Ural 1,233. The yield of chemically pure gold was 2,514 pud, 61 solotnik, 38 doli. According to this statement, and a statement for the same sources giving the yield of Schlich-gold as 2,631 pud, 30 pounds, the fineness of the latter gold may be assumed at 0.955. In the annual reports of the Director of the Mint of the United States, the gold production of Russia is given as follows, official data being cited as authority here also ; — Kg.f. (33,650) (41,000) (42,100) (43,100) (43,300) (36,800) (35,912) 32,912 Lastly, Mr. Ottomar Haupt, in his "Monetary History of Our Times," Paris, 1886, has given the following state- ment, again based on official statements made to him from St. Petersburg. Quantities indicate gold fine : — Pud f. Roubles. 1868 - - 1,635 = 22,320,000 1869 - - 1,542 = 21,056,000 1870 - - 1,957 =-- 26,711,000 1871 - - 2,187 = 29,872,000 1872 - - 2,127 = 29,083,000 1873 - - 2,090 = 28,546,000 1874 - - 1,799 = 24,562,000 1875 - - 1,889 = 26,792,000 1876 - - 2,602 = 35,538,000 1877 - - 2,249 = 30,716,000 1878 - . 2,329 = 31,799,000 1879 - - 2,319 = 31,674,000 1880 - - 2,355 = 32,163,000 1881 - - 1,052 = 14,374,000 1882 - - 1,239 = 16,919,000 1883 - - 1,796 = .24,523,000 1884 - - 2,350 = (32,000,000) 1885 - - 2,327 = (31,700,000) In this last table there are remarkable sudden variations of great amount, in successive years, as, for instance, in the years 1881 and 1882. Looking at the previous five years, we can hardly believe that such extraordinary changes took place in the actual production of gold, and the varia- tions in the figures are probably to be explained by the fact that the delivery and recording of quantities of gold were occasionally delayed, and carried on to a later year. In the other statement of Russian gold production these variations do not appear. Possibly the discrepancies may rest on the circumstances that some statements are for calendar years, others for fiscal years. Occasionally we find figures that are quite inexplicable. Thus it is said in an essay by Mr. Ivanow, published in the " Journal de St. Petersburg " and reprinted in the " Journal des Bcono- mistes"for September 1883, at page 414 : "Theprodue- " tion of gold in Russia in the year 1882 gives to our " country the first place after the United States, putting " it before Australia. We extracted in 1882 57,000,000 " rubles gold, while Australia extracted no more than " 50,000,000." The official figures communicated to Mr. Haupt from St. Petersburg- give the gold production for 1881 at 14,374,000 rubles, only a quarter of this esti- mate in the " Journal de St. Petersburg." The sum of 57,000,000 rubles gold is equivalent to 66,000 kilograms fine, which is double the quantity given in our general table as the presumable actual production of gold in Russia for 1882. Notwithstanding incomprehensible exaggera- tions of this kind, the above-cited essay by Mr. Ivanow has many sound and noteworthy remarks, especially in what he says of the insufficient plant, the primitive machi- nery, and the reckless methods, of the smaller mining companies of Siberia, and also in what he says about the widespread frauds in the delivery of the gold. Upder a 54648, better system Siberia would probably yield for a long time in the future a great deal of gold, without there being any danger of exhaustion of the gold fields. But, as already has been noted, the variations in the different statistical statements are not of decisive importance if periods of several years be considered. In regard to the character and future of the Russian production of gold, opinions vary greatly. As has been pointed out, it is carried on with poor technical means, little capital is employed on a large scale, and the condition of the workmen is abominable. Criminals and vagabonds form the bulk of the men employed in the washings, and theft and embezzlement constantly occur. If these evils were remedied the production of gold in Russia might increase considerably. Striedter, in the " Russian Review " for 1883, Nos. 8 and 9, states that by far the largest i)art of the Russian production is carried on by washing in sand deposits, and that comparatively little true mining is carried on. The increase of the Russian gold production is to be explained by the fact that new fields are constantly hunted up since the yield of gold from the sand and gravel de- posits, originally high, diminishes everywhere, except in the district of Olekminsk. It has been necessary to push constantly farther eastward. During the decade from 1851 to 1860 Eastern Siberia yielded two thirds of the total Kussian product of gold, and since 1871 this proportion has still further risen. In recent years attention has been directed to new fields in the Amur district; but there the limit of new discoveries would be reached. Striedter con- cludes that the increase of gold production which arose from the sand deposits of Russia will before long have reached its highest point. On the other hand, it has been said that although a continuous increase in the Russian gold production is not to be expected, on the other hand, increasing knowledge of the geological conditions of Siberia and the Amur country, and improvement of industrial conditions, especially in the means of communication and in technical apparatus, may lead to a profitable production of gold for many years in the future, the more so if pro- duction in the future is carried on more by true mining. An English traveller, Mr. H. Lansdell, in his " Journey through Siberia," 1882, says : — " The yield of gold in some valleys in Amur is almost fabulous. In Albazin, which belongs to the Upper Amur Company, I was told that in the 10 years, from 1869 to 1878, there had been produced 160 pud gold per year, which, at the rate of 2,000Z. per pud, gives a total sura of 3,000,000/. On the River Vitim between 300 and 400 pud were produced in the summer of 1878. In Eastern Siberia, in the years from 1833 to 1870, the exportation of gold was about 30,000 pud, whose production employed in some years more than 30,000 workmen." Since 1881 Russian fugitives have opened a new and rich yield of gold in the Chinese Amur country, in the neighbourhood of the station Amasarsk, on the River Sheltuga. In the first year 500 men were at work here ; in the second year there were already 3,000. The year 1883, when 7,000 persons were at work in the new gold fields, was the culminating time ; since then the number has gone down again to 3,000, The gold fields are about 7 werst square. The sand containing the gold is veiy care- lessly washed, and from 100 pud sand from 2 to 10 solotnik gold are obtained. Most of the men net nothing, since all articles of food are extraordinarily dear. In former times the Crown bought gold through its officers at the rate of 3 rubles 40 copecks per solotnik. But this was soon dis- continued, as the officers made profitable contracts with the Chinese and turned over very little gold to the Crown. Tiie recent increase in the export of gold from Chinese ports (3,186,461 Shanghai taels in 1885) is probably con- nected with the production of gold in the Amur country. Professor Lexis, who has tor some time given special attention to the Russian production of the precious metals, is of the opinion (see Schmoller's Jahrb., X. 1., 1886) that " Russia for a number of decades will continue to add on " the average 60,000,000 to 70,000,000 marks annually to " the gold product of the world." In regard to the production of silver in Russia, for which separate statistics are generally given in connexion with the statistics of gold, we have inserted no figures, since the production of that metal in Russia, as compared with the total production, has always been quite insignificant In the years from 1876 till 1884 the annual average pro- duction of silver in Russia was less than 12,000 kilograms. As regards Mexico, the estimates of the production of the precious metals have been based from the outset on the coinage of that country. But it has always been known that the actual production must have been considerably in excess of the sums indicated in this way since there has been a secret export of uncoined precious metals and a consumption within Mexico in the arts. From time to App. XVI. 154 EOYAI. COMMISSION ON GOLD AND SILVEE. : App XVI. time exportation in bars has been permitted by law, of which the amount has then been recorded. The coinage has been in the fiscal years ending June 30, as follows :— Average. 1968-75 1876 - .1 1877 • 1878 1879 1880 1881 1882 1888 1884 188B Pesos. 17,662,000 42|80'0 Pesos. 860,700 19,!DIX. 16^ Takinrf an a\ei'a,ae of the five ys'ftrs, 1881-1885, we get an annual import from Mexico, Colombia, Guiana, Peru, Bolivia, and Chili of 4,948 kilograms gold and 1,267,000 kilograms silver. These figures can be made to agree with the estimates we have given of the total product, and the general correspondence of such independent statements indicates that we can get near enough to the truth. The gold product of Brazil, formerly so large, has been comparatively small for several decades. Only the St. John del Rev Mining Company can -show considerable operations and some profit. 'I'he Morro Velho mine of this company produced, according to the published reports, the following amounts of gold : — Tears. 1883-84 1884-85 18S5-8G Oitavas. Ounces Troy. 198,710 226,-H6 242,035 22,909 20,102 27,1103 Value in £. 89,202 101,084 108,047 In the last fiscal year each ton of quartz yielded 0473 ounce of gold, and 279 per cent, were lost. In the Cujaba mine of the same company there were produced in 1884-85 3,043 ounces gold and in the year 1885-86 2,809 ounces. In the latter year the gross product w^is less than expenses by 1,455?. The Santa Barbara Mining Company produced in the year 1885 42,029 oitavas of gold, having a value of 17,862/. The Pitangui mine produced in the same year only 6,922 oitavas of gold, equal to 2,964 Z. The remaining mines yielded together but a few thousand ounces of gold, and produced at a loss. The total production of gold in Brazil has amounted in recent years on the average to no more than 1,000 kilograms fine. English experts assert that the production of gold in Brazil may be greatly developed since hitherto only outlying veins of quartz have been worked. The gold- bearing ore of the Cujaba mine is enormous in quantity. The assay indicates 0-380 ounce of gold per ton, but no more than 0'159 ounce was secured, showing a loss of 57 per cent. An improved method of amalgamation would secure the refractory gold which now is lost in the tailings. We get from ofiBcial statistics the following statements as to the production of precious metals in Germany, inclusive of the yield from imported ores : — Tears. Gold. Kg. M. Silver. Kg. M. Average 1831-40 Inconsiderable 29,800 5,364,000 1841-50 „ 36,000 0,480,000 1861-00 17,3 48,000 56,235 9,943,000 1861-70 61,4 171,000 78,722 14,170,000 1871-75 284,4 793,000 143,080 25,764,000 1876 - 281,3 784,058 139,779 21,969,415 1877 - 307,9 857,845 147,612 23,812,056 1878 - 378,5 l,056,.'i38 107,660 26,390,3,Sa 1879 - 460,7 1,,'502,.398 177,507 26,518,123 1880 - 4<33,o 1,2(11,752 186,011 28,007,501 1881 . 380,6 1,062,665 186,990 28,614,081 1882 - 376,1 1,061,155 214,982 32,763,067 1883 - 457,3 1,278,312 235,063 35,087,897 1884 • 665,0 1,560,868 248,116 37,055,801 1885 - 010,6 1,706,608 (277,900) (39,760,000) Of the total silver product of the year 1885, 79,952 kilo- grams came from the Kingdom of Saxony (Freiberg), 75,075 from the Mansfield mines, 39,321 kilograms from the Claus- thalmines, 33,127 kilograms from the Stollberger Company, 60,425 kilograms from other sources. At present Germany produces about 9 per cent, of the total product of silver. Such gold as is produced in Germany is obtained, with insignificant exceptions, by separation from silver and silver ores, or from copper and copper ores. The German refining works have attained extraordinary skill in such work, and of the silver produced in German works a considerable part comes from the im- ported ores. Exact statements as to the extent of this im- portation are lacking since 1876. For that year (1876) the official statistics stated the production of silver from foreign ores to be 16,()33 kilograms. Trustworthy estimates indi- cate that in 1878 this product had risen to about 43,500 kilograms. For the year 1884 it is estimated that silver production in Germany was about 160,000 kilograms from domestic ores and 88,000 kilograms from imported ores, ■^rhe increase of our production of silver is therefore to be ascribed mainly to the increasing use of foreign raw material. In the year 1884 there were produced on account of the fiscal works in Harz and at Freiberg about 85,000 metric cwt. of silver ore, which yielded about 235 kilograms gold and about 60,000 kilogi%,ms silver, having, all told, a value of about 8,000,000 marks. It is a curious distortion of the facts to assert, as has sometimes been done, that the importation of foreign silver ores from the West Coast of America, from Spain, and latterly even from Australia, for smelting in Germany, is to be regretted because it serves to drive gold out of Germany in exchange for silver, of which there is already more than enough. It should be remembered that the silver ores are paid for by the export of German commodities ; that the mixture of foreign with domestic ores is necessary for the more perfect working of the latter ; that Germany exports far more in refined silver and in manufactures of silver than the imported ores cost ; and lastly, that no inconsiderable decline in the demand tor German labour would result if foreign silver ores were excluded. In Austro-Hungary the production of ^he precious metals, according to official statements, was — Apr. XV r. Tears. Gold. Silver. Tears. Gold. Silver. Average, 1851-1855 - Kg. , 1,775 Kg. 35,000 1878 Kg. 1,824,1 Kg. 48,062 1866-1800 - 1,500 31,700 1879 1,010,6 48,195 1861-1805 - 1,090 30,600 1880 1,645,4 47,701 1806-1870 - 1871-1875 - 1,050 1,395 39,970 38,660 1881 1882 1,697,3 1,740,8 48,942 47,663 1876 1,903,6 47,947 1883 1,647,0 49,335 1877 - • ■ 1,713,4 47,675 1884 1,703,3 49.907 We may now mention recent reports from other countries producing the precious metals, in order that they may not be entirely neglected. The mines of Norway produced in the fiscal year 1883-84 6,387 kilograms of fine silver, and the Swedish mines produced in 1883 1,583 kilograms, and in 1884 1,816 kilograms. In Great Britain silver was produced as follows from domestic lead ores : — Tears. Ounces. S Tears. Ounces. £ 1878 - 397,471 88,297 1882 - - 372,544 80,426 1879 - 333,674 70,900 1883 - - 344,063 72,484 1880 - 296,518 63,015 1884 - - 326,718 68,791 1881 - 308,398 67,140 1885 - 320,620 64,938 The production of silver in British smelting works from imported ores is much larger. In the year 1885 silver ores were imported into the United Kingdom of the declared value of 1,085,227/., of which 288,992/. came from Spain, 514,844i. from America, 117,841/. from Australia. It should be stated that the value of these ores consisted mainly in the silver contained in them. It is probably not too high an estimate if the yearly production of silver in Great Britain in recent years is put at about 120,000 kilograms fine. For France the official " Statistics of Mineral Industry in France " for 1881 state the production of silver to be 54,718 kilograms, of the value of 10,279,145 francs. The silver production of Spain is estimated for the year 1880 at 65,871 kilograms, and for 1883 at 54,335 kilograms. The declared export of silver in bars amounted in 1883 to 209,721 kilograms. The export of silver ores and of silver bearing lead is much larger. 158 RO^AL COJIMISSION ON GOLD AND SILVER I App. XVI. In regard to the production of the precious metals in . Italy the " Annuario Stastistico Italiano for 1884," contains the following statement for the year 1 88 1 : — Silver ores were produced in four mines to the amount of 1,444 tons, having an average value of 1,650 lire, making a total of 2,238, 961 lire. Gold ores were produced by 24 concerns to the amount of 12,190 tons, having an average value of 38'98 lire, and a total value of 475,1/0 lire. Amalgamating establishments produced 214 kilograms of gold having a value of 690,000 lire. In the Pominion of Canada not inconsiderable quan- tities of gold have been produced, especially in British Columbia and Nova Scotia. The quantity of gold there produced is estimated for 1881 at 1,648 kilograms, and for 1883 at 1,435 kilograms. For Nova Scotia alone the production of gold is stated for 1882 to be 14,107^., and for 1883 to be 16,446Z. From Nicaragua there was -in 1884 a declared export of 16,472 Spanish ounces of gold. The actual export is said to have been considerably larger. Opinions differ as to the future production of gold in that region. A number of stock companies have been formed in recent years for the purpose of carrying on the gold production of gold on the West Coast of Africa, in the Transvaal, and in British India. With few exceptions they have been unsuccessful, and much capital has been entirely lost. Occasional instances of success may be mentioned, as follows :— The Wassaw (Gold Coast) Mining Compmy, which in 1885 produced gold to the value of 6,497/. ; the Moodie Gold Mining Company (in the Transvaal), whose monthly product in 1885 is stated to average 2,500 ounces (about 8,500Z.). The Mysore Gold Mining Company (in India) divided 10 per cent, dividends in 1885. Its monthly product rose from 300 ounces to 1,000 ounces, and amounted in January of the present year (1886) to 1,135 ounces. The export of gold from Port Natal is given for 1882 as 6,865L, for 1883 as 20,293/., for 1884 as 16,708/. It is worth noting in regard to the production of gold " that although by far the larger ])art of the new under- takings which begin actual work, not to mention the mass of swindling concerns which never get so far, lose money, and are soon given up, yet not inconsiderable quantities are produced by such undertakings and make their way into trade. Whether the sum invested in pro- ducing this gold is replaced by the product is immaterial, since the new gold is there, and the sovereigns which the stockholders may have put out in expenses are not lost, The share which the chief producing countries had in the total production of the precious metals between 1851 and 1885 may be estimated as follows (the value of silver being reckoned according to the actual ratio) : — Where produced. Gold. Where produced. Silver. Million M. Per cent. Million M. Per cent. United States . . . - Australia - - - - Russia - - - - - Mexico, Columbia, Brazil Other Countries 6,697,5 6,341,6 2,977,8 707,7 1,086,5 37,0 36,9 16,7 4,0 6,1 United States Mexico - - . - Peru, Bolivia, Chile Germany .... Other Countries - . - Total - 2,551,1 3,326,1 1,672,6 668,6 1,379,5 26,6 34,4 17,6 7,0 14,4 Total 17,810,1 100,0 9,697,3 100,0 Finally, for the sake of comparison and completeness, we insert the estimates of the world's production of the precious metals, which appear in the Annual Reports of the Director of the Mint of the United States : — Total Production op the Precious Metals in 1883-1884. 1883. ' 1884. Where produced. Gold. Silver. Gold. Silver. Kg. Thousand Dollars. Kg. Thousand Dollars. Kg. Thousand Dollars. Kg. Thousand Dollars. United States - Russia Australia - Mexico - German Empire Austro-Hungary Sweden - . Norway - Italy Spain Turkey Arsrentina Colombia - Bolivia Chile Brazil Japan Africa Venezuci.-i Canada - France - Peru - 46,140 3.5,913 39,873 1,438 457 1,638 37 109 10 118 5,803 109 24.5 962 256 3,000 5,022 1,435 179 30,000 23,808 26,600 966 304 1,089 26 72 7 78 3,866 72 163 632 170 1,994 3,3SS 954 119 1,111,467 7,781 2,151 711,347 230,094 4«,708 l,Bs;j 5,645 432 74,ri0o 2,164 10,109 18,283 .384,985 128,106 21,121 1,041 6,356 45,909 46,200 323 89 29,569 9,589 2,026 66 236 18 3,096 90 420 760 16,0111) 6,326 878 68 264 1,908 46,343 32,829 42,960 1,780 655 1,658 19 109 10 118 5,802 109 245 962 266 3,000 5,032 1,436 179 30,800 21,818 28,561 1,183 369 1,102 13 72 7 79 3,856 72 163 632 170 1,994 3,338 964 119 1,174,205 9,3.36 2,788 653,868 21S,116 49,424 1,816 0,387 432 3,562 2.164 10,109 18,286 884,986 128,106 21,121 1,641 6,366 45,909 45,800 888 116 27,268 10,312 2,054 75 266 18 148 90 420 76 16.000 6,325 878 68 264 1,903 Total 141,733 94,197 2,812,972 116,923 143,381 96,292 2,770,610 116,148 In what has preceded we have contented ourselves with presenting such detailed statements as are either of importance for the total or else significant as illustrating the variations in different statements. These statements have been the basis of the figures summarized in the tables. _ We have also referred to certain noteworthy events in the production of the precious metals in recent times, although for the present they are not of any great importance. We cannot enter into a detailed and critical consideration of the most recent phases of the production of the precious metals. Such an investigation should be separately undertaken. What has here been presented is meant to give information only on the salient points. Above all, we wish to present material by which the practical importance of certain essential changes in the conditions affecting the production of gold and silver may be more easily understood. For such^a purpose detailed figures seem less useful than the concisest possible preseii- •tation, even though this latter may be open to the charge of being incomplete and based on scant authority. APPENDIX. 159 CO 'C a I O 00 O -^ Q O ? 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Htfi ''H •*" i-"" ■■'» (M 00 M i-H r- Oi CD in US m in US Tji ijt I I I I I I J hHM t*o nl3 >-i[ci jj|iO rW (5)0) «|to J^a^ Ml* r<|fl ..T-(r-( &3C'ii-o in 10 00 CO 00 00 00 in in CD CO CO CD CO ^ '!D QO 00 00 CO 00 00 00 00 00 00 00 00 GO 00 160 ROYAL COMMISSION ON GOLB AND SILVER: App. XVI. 2. Relative Value of Silver and Gold. Calculated according to the price of Silver in London.* Years. 1-3 1 .a 1 »-3 ^i Si P. W •i 1- o 1 o >!5 o P 1 Average per Year in Hamburg. 1861 15,30 16,32 16,33 16,83 16,43 15,43 15,52 16,49 15,57 16,65 15,62 15,52 15,16 15,35 1852 15,52 16,59 15,62 16,63 15,75 16,73 * 16,61 16,62 15,62 15,49 15,32 16,35 15,58 16,42 1853 15,36 16.38 16,36 16,36 15,41 16,16 15,ss 16,80 15,21 15,40 15,14 16,27 15,33 15,35 ISSl 15,27 15,29 15,26 15,20 15,27 16,36 15,36 15,40 ■15,36 15,40 15,36 15,32 16,33 15,22 1855 15,33 16,32 15,36 16,52 15,13 15,33 16,33 15,33 16,29 15,36 16rfl 15,36 16,36 16,32 1866 15,.io 15,38 15,47 15,46 15,43 15,13 15,10 15,35 16,24 16,21 15,15 16,18 IS^Sl 1.6,31 1857 15,15 15,24 15,27 15,27 16,33 15,26 1P,29 16,24 16,32 16,26 16,29 15,26 16,27 15,24 1868 15,3S 16,27 15,32 15,.,6 16,33 16,33 15,14 15,17 15,51 15,40 15.29 15,30 16,36 15,26 1859 16,21 16,27 15,26 15,18 15,12 16,19 16,13 16,21 15,27 16,21 16,21 15,21 15,21 16,22 1860 16,18 15,19 15,18 15,29 16,30 15,10 16,11 15,36 15,30 15,29 16,32 15,35 16,30 15,25 1881 15,39 16,41 15,24 16,4. 15,43 16,57 16,67 15,61 16.57 15,52 15,47 15,43 15,18 16,3S 1862 lj,l)5 16,32 15,38 16,41 16,40 15,33 15,16 16,11 15,38 15,33 15,21 16,29 15,36 16.32 1863 15,29 16,33 16,33 15,43 15,38 15,35 15,41 15,10 15,43 15,38 15,35 15,85 15,36 15.29 1864 ir.,23 15,33 16,33 15,54 16,16, 16,10 16,41 16,38 l.),:i3 16.16 15,47 15,39 15,39 15,29 1865 15,33 16,35 15,41 15,54 15,54 15,57 15,55 16,51 15,51 15,44 16,10 15,32 16,13 15,32 1866 15,32 15,43 15,47 15,65 15,32 16,19 15,35 16,57 15,51 15,40 15.47 15,19 15,11 16,27 1867 16,49 15,53 16,52 15,46 16,55 15,59 15,59 16,60 15,63 15,61 16.66 15,61 15,57 15,40 1868 15,62 15,59 15,54 15,55 15,59 16,62 16,61 15,61 15,66 15,64 15,59 15,54 15,61 16,52 1869 15,53 16,« 15,57 15,57 16,65 15.68 15,61 15,64 16,60 15,61 15,59 15,59 15,60 15,53 1870 16,5, 16,60 16,59 15,61 15,60 16,60 16,15 15,59 16,62 15,59 15,56 15,58 15,60 13,15 1871 15,57 16,58 15,61 15,66 15,66 15,63 15,57 16,51 16,52 ■ 15,60 15,50 16,52 15,58 16,51 1S72 15,59 13,15 16,51 15,57 16,68 15,70 15,68 16,68 lfi,61 15,70 15,85 15,79 16,64 15,56 .1873 15,75 15,75 15,75 16,78 16,32 15,88 15,90 16,96 16,00 16,05 16,26 16,25 15,93 15.95 187* 16,05 16,05 16,00 16,01 16,06 16,06 16,15 16,26 16,3= 16,33 16,26 16,40 16,16 16,05 1875 16,38 111,12 16,51 16,47 16,61 16,71 16,90 16,76 16,63 16.56 16,61 16,71 16,63 16,51 1376 16,98 17,33 17,67 17,55 17,80 17,2, lU.so 18X17 18,21 17.96 17,50 16,65 17.80 17,72 1877 16,35 16,51 17,16 17,40 17,42 17,59 17,44 17,42 17,32 17.13 17,30 17,20 17,19 17,24 1878 17,53 17,38 17,30 17,« 17,62 17,76 17,92 17,97 18,33 18,71 18,65 18,87 17,96 17,96 1879 18,81 18,88 19,03 18,97 18.47 18,18 18,18 18,29 18,29 18,11 17,66 17,94 18,39 18,31 1880 17,96 18,05 18,14 18,13 18,09 17,97 17,90 17,90 . 18,02 18.11 18,22 18,19 18.06 18,00 1881 18,36 18.12 17,99 18,11 18,22 18,37 18,27 18,29 18,23 18,15 18,16 18,18 18,24 18,15 1882 18,15 18,12 18,15 18,07 18.04 18,09 18,20 18,15 18.17 18,23 18,38 18,70 18,27 18,17 1883 18,70 18,60 18,50 18,61 18,78 18,71 18,71 18,66 18,57 18,51 18*9 18,58 18,65 18,62 1884 18,5.1 18,42 18,51 18,58 18,55 18,57 18,57 18,59 18,58 18.62 18« 18,98 18,63 18,58 1885 18,98 li',17 19,21 19,10 19,05 19,22 19,17 19,32 19,72 19,88 19,88 19,98 19,39 19,12 1886 20,20 20,22 20,17 20,33 20,75 20,01 21,65 22,29 For the j mistake (o that date. ears 1861 to 1880 these figures a r misprint) for July 1874 is corr After 1880 tlie ratio is based on re taken from Dr. 0. BCted, the figure 16-9 Pixley and Abell's p .1. Brooh's 5 for that E •ices. Tableaux Qontb beii pres6nt(Ses d, la con g replaced by 16-1. f^rence , which mon^taire, Paris, corresponds to tl 1881. An obvious le price of-silver at • Taking d for the price in English pence for the ounce troy of standard silver (O, 925 fine) and w for the corresDondino- ,-Bi„f;„o „ i i. .. silver and gold we have d x w constant = 942,9958. "-"iiesponamg relative value between Remarks on the Tables showing the Ratio of Silver to Gold. In the second part of the essay published by us in Petermann's " Mittheilungen " we have considered in detail the ratio between silver and gold up to the year 1878. In the present paper we confine our attention, for the period before 1851, to certain salient points. The earliest information which we have on this subject is furnished by the carefully made standards which were discovered in the foundations of the palace of Khorsabad, built by the Assyrian ruler Sargina in the year 708 B.C. The gold plate weighs 167 grams, and was |a of the light Babylonian mine. The silver plate weighs 438.62 grams, and was meant beyond doubt to be the equivalent in silver to 1^ of the gold mine. These plates are in value to each other asSto I,in weightas 3 to 8 ; from which weponglude that the normal ratio of gold to silver in the ancient Asiatic civilisation was 3 : 40, or 1 : 13^. In yiew of the stability of industrial conditions in Oriental countries it IS ikely that th>^ ratio had already existed many cen urfes before the Ijmlding of the palace. The same ratio bpl^ good under the Persian kings, as is proved bTthe fact S Herodotus calculates the tribute paid bv the rnHilr I 360 talents of gold, or 4,680 talente of lilte wS in dicates a ratio of 1 to 13. ' ^'i'''" m- !■?,• "i P'S^.°^°P^j° ti'eatise of about the year 400 B C entitled - H.pparchos," it is mentioned as a well-known "fl;; that m Greece gold was worth 12 times as much as^lveT Many calculations found in inscriptions and other reco/ds of the period between the Peloponnesian war and the tTme of Alexander the Great show that in those d«v« +1^. ? . between gold a^d .ilver in Greece mainta Ld ftself some" where between 1 : 13i and 1 • 1]^ ®°™^" . After theponquest of the Persian empire a larger ouantitv of gold made its way to Greece. The sack nf f K» +^ ^ at Delphi also serve'd to add gold, anVtt vaVueVfTold'^ APPENDIX. 161 compared with silver sank to 1 : 10. This ratio was also used in the year 189 B.C., in the treaty of peace between Rome and the /Etolians. In Rome, in the sixth and seventh centuries A.U.C., the pound of gold was reokoned at 4,000 sesterces. This indicates a ratio of 1 : 11.91, a ratio which remained un- changed till the time of Augustus. It is mentioned that in the year 218 B.C. the scruple of gold was coined into 20 sesterces, indicating a ratio of 1 : 17.14. It is also reported that about one century B.C., after the discovery of the rich gold field of Aquileja, the value of gold sank by a third (^). Further, it is said that when Cfesar brought great sums of gold from Gaul, the pound of gold was sold for 3,000 sesterces, indicating S, ratio of 1 : 8.93. But all these seem to have been excep- tional cases of temporary duration, which are mentioned by historians only because of the surprise which they aroused at the time. Reckoning the ratio of gold to silver according to the coinage regulations of the first centuries of the imperial era, we find that the ratio varied from I : 11.30 to I : 12.20. In the imperial ordinances of the years 397 and 422 (Cod. Theodos., XIII.,2, I, and VIII., 4, 27) it is pro- vided that a pound of silver shall be accepted as equivalent, sometimes to five, sometimes to four gold solidi, which would indicate a ratio at that time sometimes of 1 : 14.4, sometimes of 1 : 18. It is, however, our opinion, which we have not space here to support by full discussion, that these ordinances do not indicate what was the ratio in trade, but were meant simply to lighten the payment of debts, and also to encourage payments in gold. An appre- ciation of gold at the dates of these ordinances is, it is true, not improbable, since in those troubled times the practice of hoarding may well have been common, and gold was most likely to be used for that purpose. For the first centuries of the Middle Ages our data in regard to the ratio of the precious metals are few and un- certain. The Edictum Pistense, in the year 864, enacted for the Frankish Empire that the pound of gold (fine) shoidd pass at no higher rate than 12 pounds of silver of new and good denarii ; and that a pound of gold which, though refined, was not refined to such a degree that it could serve for gilding, should pass for 10 pounds of silver. It must be remembered that the denarii, even though not intentionally debased, contained by no means fine silver, and that on the other hand the cost of coinage has to be reckoned in comparing gold to the silver coins. Assuming these two circumstances to balance each other, we should get for the Carolingian period a normal ratio of gold to silver of 1 ; 12. For subsequent times, up to the beginning of the 16th century, we have a large number of mint ordinances and mint treaties of various countries from which the ratio in which gold and silver were coined may be calculated. But it is a great mistake to suppose that from such sources we can obtain with certainty the actual ratio between the precious metals. The sudden and great changes which are apt to occur within very short periods in the regulations of one and the same mint suffice to make us suspicious, not to mention the great discre- pancies between the contemporary regulations of different countries. The task of sifting the various data for the Middle Ages and of securing statements that will indicate with some accuracy the actual ratio at different times is an exceedingly difficult one. Upon the whole it may be said that the ratio between gold and silver was, in European countries, between the 9th and the 16th centuries, some> where from 1 : 12 to 1 : 10. Yet there are certain striking ex- ceptions ; as when, for instance, a code of Jutland of the 13lh century makes one mark of gold equivalent, in valuation of land and in fines, to eight marks of silver. We limit ourselves to a few trustworthy statements which refer to actual transactions or to actual coinages of both metals at the same time.* In Lubeck the purchases of gold and silver took place according to the following ratios : In 1346, at a ratio of 1 ; 11.33; in 1365, at I : 11.37; in 1441, at 1 : 11.12. The contemporaneous coinage took place at a ratio of from 1 : 12 to 1 : 12.40. Professor Rogers gives certain notices, gathered from ancient accounts. According to these, in the year 1262 and subsequent years, the mark of gold was considered equal sometimes to 9 marks and 1 1 J shillings of silver, sometimes to 10 marks of silver, and sometimes to 9J marks of silver, ,which gives on the average a ratio ofl : 9.74. A bill of the year 1292, on the other hand, reckons 270 gold guilders, weighing 53^ ounces, as equal to 6681 ounces of silver, which would give, if the gold and * The authorities for these statements may be found in our essay above cited, and in Jtofters's " History of Agriculture and Prices in Enghind. ' Compare also W. Sohalk, Munzfuss der Wiener Pfennige. o 54648. silver were equally fine, a ratio of 1 : 12.54. It seems certain that extraordinary changes took place at that time in England, and it is practically impossible to get any average from scattered notices of this kind. The best way to get an approximately correct statement of the ratio of gold to silver in the trade of the Middle Ages probably is to use the table which is printed in the well-known treatise, " Delia Deoima .... della Moneta e della Mercatura de' Fiorentini " (published in 1765). Gold and silver were coined as follows : — Ait X/r. In the Years. Grains of Gold in Gold-Gulden. Grains of Silver per Lira. Relative Value. 1263 - 72 770 1:10,70 1306 - 72 783J 10,88 1324- - 701 960 [sic] 13.62 1345- 7U 778^5 [sic] 10,88 1375 - - 71f 773{ 10,w 1402 - 68 717!-» 10,s, 1423 • 71f 739 10,18 1460 - . - 71? 7721 9,3. 1462- 711 674J 9,ss 1464 - - 72 833S[sic] 11,« 1471 - - 72 76011 10,S7 1480- - 73 7811 10,85 1486 • - 72 - 7621 10,« 1496 - 72 7621 10,15 Putting aside the years 1324, 1345, and 1464, in which it seems likely that the Mint set an exceptionally high value on gold in order to attract it to the town, we find that there was in Florence, then the central point for monetary transactions, a fairly stable ratio, varying between 1 : 9.33 and 1 : 10.87. For the period from the discovery of America to the year 1687 (when we begin to get continuous and exact figures) we have more numerous data than in the preceding cen- turies; yet, we cannot by any means, find continuous detailed statements. Copernicus prepared in 1526 for King Sigismund a memorial on the reform of the coinage of Prussia, in which he said it was the general practice of nations to consider 1 pound of pure gold as equal to 12 pounds of pure silver; while in former times 1 1 pounds of silver had been equal to 1 pound of gold. This statement, however, does not tally with the examples occurring in the common account books (Rechenbucher) of that-, period. It must be supposed, upon the whole, that these account books give the prices that ob- tained in actual trade, the more so since their estimates are frequently repeated with but slight variations. Their prices are generally given for the mark fine of silver or for the carat fine of gold, so that the ratio is clearly presented. In an account book of Widman von Eger (edition of 1527), the average price is 7i guilders for the mark of silver and 3i guilders for the carat of gold; in Adam Riese's account book, as revised in 1518, the average of nine statements indicates a price of 8.13 guilders for the mark of silver and 83.82 for the mark of gold. The first statement gives a ratio of 11.2 : 1 ; the second, a ratio of 10.31 : I. Coper- nicus, as already stated, asserts that in 1526 the usual ratio was 12 : 1, a ratio much more favourable to gold. This is explained, perhaps, by the fact that (Jopernicus under- stood the prices of silver, as communicated to him, to be for fine silver, whereas they may have referred to what was called fine silver in the language of the time, that is, as to silver 16-16 fine. According to a coinage edict for the Empire, approved November 10, 1524, at Esslingen, the mark of gold was to be coined into 89 gold guilders 22 carats fine, while the mark of silver, 15-16 fine was to be coined into 8 thalers. This indicates a ratio of 11.38 : I. We have gone into this detailed discussion of a single point chiefly in order to win the reader's confidence for the following summary statements which rest upon careful in- vestigation of the ratio to the close of the 1 7th century. The statements, it must be remembered, are no more than estimates, since considerable divergences in different places and rapid variations in the same place were easily possible in those times. This being borne in mind, we present a table showing the ratio of silver to gold in Germany, the Netherlands, and France for 20 year periods between 1601 X 162 ROYAL COMMISSION ON GOLD AND SILVEK i App. XVI. and 1700, and we have little fear that they vary greatly from the actual market ratios of those times and places. 1501—1620 10,75 Corresponding to a price reckoned in Marks (Standard Gold Value) of— : 1 260 M. pr. kg. flne Silver. 1521—1540 11,S5 248 „ „ „ „ 1641-1660 ll.so 247 „ „ „ ,. „ 1661—1580 11,50 243 „ ., ,. ,. 1581—1600 11,B0 236 „ „ „ ,. 1601—1620 12,S5 228 „ „ „ „ 1621—1640 14,00 199 „ „ „ ,. .. 1641—1660 14,50 192 „ „ „ „ .. 1661—1680 16,00 186 ., „ „ „ 1681-1700 :5,oo 186 „ „ „ ;. AVe observe here a distinct tendency toward a rise in the value of gold as compared to that of silver— or, if another phraseology be preferred, towards a depreciation of silver — in the course of the 16th and 17th centuries; needless to say, with many and considerable variations and exceptions at different times and in different places, ."^t the begin- ning of this period of 200 years, lOJ lbs. of fine silver would buy 1 lb. of fine gold. At its close, 16 lbs. of silver were needed to buy 1 lb. of gold, indicating a depreciation of silver of about 30 per cent. This great change in the ratio of the precious metals attracted at the time the attention of economic writers. The Italian Montanari says as early as 1683, in his "' Trattato mercantile dellal Moneta," after mentioning Bodin's state- ment of a ratio of 12 : 1, that "the ratio of silver to gold " of 12 : 1 has changed to a ratio of 14f : 1." I'his writer believed that the chief cause of the appreciation of gold was to be found in the trade with the Levant by which great quantities of the precious metals were exported, and the silver exported remained in circulation in the Jeiast, while the gold was hoarded. The conclusions which we presented in previous publi- cations as to the causes of this appreciation of gold, especially in the first half of the 17th century, have re- mained unshaken. We venture again to present these conclusions, since the events of that time present a close analogy to the similar changes in the ratio of the precious metals in modern times. What caused the extraordinary rise in the value of gold between 1601 and 1650? Was it simply an increase in silver production leading to a fall in the value of silver, or was it a decrease of gold production and an increased demand for gold leading to a rise in the value of gold ? Looking first at the statements of the production of the precious metals, we find that the production of silver was greatly increased after 1546 by the rich silver mines of Potosi, and we cannot be surprised if, in consequence, the relative value of silver should fall between 1550 and 1600. A fall, in fact, took place, yet a gradual and moderate one. Even in the years from 1601 to 1620 we note a slow change in the ratio. In the next three or four decades a quick and sudden rise in gold took place, although no extra- ordinary change occurred in the production of the precious metals. It may be alleged that the effect of the former great changes in the production of the precious metals did not produce their effect before this date, and that the real cause of the fall of silver between 1621 and 1650 must still be sought in the great influx of silver that took place after 1545 from Peru, Potosi, and Mexico. We are not disposed to deny entirely that such a postponed effect may be traced. Yet the chief cause in the great and permanent rise in the value of gold after 1620 must still be sought in the increased demand for gold that then took place, an increase of demand which far exceeded the fresh supply coming from the mines of New Grenada and Chili. The cause of the increased demand is to be found primarily in the continuous wars in Europe, which, as is well known, caused gold to be in great request. Next, it is to be found in the growth of international trade in the 17th century, which, notwithstanding the extending use of bills of ex- change, yet created the need for shipments of coin. Obviously gold, both intrinsically and because of the common prohibition of coin shipments, was a better medium than silver. Whatever may have been the decisive cause, there can be no doubt that between 1621 and, 1650 a considerable and permanent change took place in the ratio of the precious metals in all civilized countries. If wars and the necessities of Government treasuries were at the outset the chief causes, yet appreciations brought about by them could not have been permanent unless a further cause, the growing use of gold in international trade had come into operation. No explanation of such an extra- ordinary change can be found in the conditions of the pro- . duction of gold and silver. Nor can we believe, after repeated examination, that the rise in the value of gold is to be ascribed chiefly to mint regulations. On the con- trary, these regulations are generally based on changes in the price of gold that had already taken place in the open market. It is difficult to see why the Governments should arbitrarily give their gold coins a higher nominal value, and thereby degrade the ordinary money of the country. Where they wish to debase their coins they did it most easily by issuing cheaper and cheaper subsidiary coins, and devices of this kind were widely used in the 16th and the beginning of the 17th centuries. These events have nothing to do with the ratio of the precious metals, since "the ratios based upon them compare only gold and current ■silver coins. An arbitrary appreciation of gold coins as a ■ means of bringing gold to the mint was necessarily in- effective and led to loss, and was never used, except for a very short time. We now come to the explanation and statement of the ratio of the precious metals since the beginning of the I7th century. As it is not to be assumed that all those who make use of the present Materials are also able to use our earlier publication of 1879, in which this subject was treated at large, and as it is our present object to provide all necessary material ivith completeness, we repeat our earher statements. After the year lb87 we possess, in the regular quotations of the price of gold or silver at Ham- burg or at London, trustworthy data for ascertaining the ratio between silver and gold. We present this ratio for the period between 1687 and 1832 according to the Ham- burg prices from 1833, according to the London prices. The calculation from the Hamburg prices was made as early as 1866 on the basis of the original quotations by the Hamburg Bureau of Statistics. This was done by ascer- taining the highest, the lowest, and the average rates from the 104 quotations of each year. After 1833 we gave up these Hamburg tables, and made use of the tables of the more important London brokers. We should not omit to state, for the sake of .completeness and impartiality, that the late Mr. Ernst Seyd prepared, for the years from 1733 to 1819, a series of figures noted at the Bank of England, which he compared with the Hamburg figures used by us. Mr. Seyd communicated no details as to these English quotations or as to the manner in which his averages were reached. He made the mistake, moreover, of assuming that in giving the price of silver in pence per standard ounce, we were trying to ascertain the contemporary London price of silver by means of the Hamburg price. As a matter of fact, we carefully explained that we used this method only for the sake of expressing the price of silver more clearly in the terms now commonly used. It goes without saying that in the last century the greater cost of transportation and other cu-cumstances might have caused the price of silver in Hamburg and in London to differ by several per cents. As a market for silver, Hamburg, possessing as it did a bank money based on fine silver and a large fund of silver in the \'aults of the bank, probably took higher rank than London. We therefore believe that the ratio as ascertained from the Hamburg quotations for the period from 1687 to 1832 is, upon the whole, the standard ratio. Mr. Seyd's criticism rests on his belief that "the prices of silver at London from the beginning " of the century to 1872 are an absolute indication of the '• exact ratio between silver and gold- It is mathemati- " cally certain that the variations in the price of silver at " London before 1873 above or below the price of 60|^ " pence per ounce result only from changes in the actual " value of silver." Arranged by periods of several years, the average ratio of silver to gold was as follows : — Years. Kg. Silver for 1 kg. gold. Corresponding Price. Pence per Ounce. 1701-1710 1711-1720 1721-1730 1731-1740 1741-1750 1751-1760 1761-1770 1771-1780 1781-1790 1791-1800 1801-1810 1811-1820 1821-1830 1831-1840 1841-1860 1861-1865 1856-1860 1861-1865 1866-1870 1871-1875 1876-1880 1881-1885 15,J7 16,15 15,00 16,07 It 14,81 14,64 14,7s 15.12 15«Si 16,51 16,80 15,75 16.83 16,»i 16,30 16,« 15,5f 18,n 17,81 18,63 61J 62A 621 eS 641 63i 61J 6O1V 60} 59 -J 59t 5BA . 6l| 61i 60i 59lW 6o;-° Al'PENlJlX. 163 This table shows, for about 110 years beginning with 1681, a noteworthy stability in the ratio, especially when compared with the continuous rise in the value of gold from 1501 to 1650. The growth of international trade and the great increase in the Mexican production of silver might lead us to expect a further depreciation of that metal. If no such depreciation set in, it may be explained by the fact that the Spanish piaster became the coin in use for many international transactions. Moreover, there was a continuous and large flow of sih-er to the East, where, from time to time, gold was exchanged for silver at rates advantageous for Europe. In the years from 1751 to 17?^ one notices even a slight fall in the value of gold. There is no doubt as to the cause of this phenomenon, since it took place at the time of the distribution over Europe of the increased gold product of Brazil. The opinion was then cummonly entertained by Govern- ments that legislation should fix the ratio of silver to gold by mint regulations. Consequently, the fluctuations in the value of gold, and especially its rise after 1782, caused a number of regulations in different countries. None of these was of greater importance or effect than that of France, issued October 30, 1/85, entitled "Declaration " du roi portant fixation de la valeur de I'or relativement " a I'argent, etc." After an introduction stating that the intrinsic value of French gold coins was above their nominal value, and that they were continually exported, and that it was accordingly necessary to reduce the weight of the gold coins, the first article begins with the clear and simple provision : — " Chaque marc d'or fin de 24 karats vaudra 15 mares et demi d'argent fin de douze deniers, et sera regu et pay^ dans DOS Monnaies et Changes pour la somme de 828 livres, 12 sous, valeur des dits I5| marcs d'argent au prix actuel de 53 livres, 9 sous, 2 deniers, le marc."* This ordinance marks the origin of the ratio between the precious metals which for a number of decades was con- sidered normal, and whose establishment at the mints by statutes and treaties is now desired in so many quarters. It cannot be said that the ratio of 15^ .- 1 was at that time ( 1 "SoJ the actual ratio in free markets. For here a mark of gold was worth only about 15 marks of silver. The Frsnch ordinance obviously was intended to raise the nominal value and the current value of the new gold coins, in order to further the flow of gold to the mint and to prevent the melting and exportation of the new coins. The French coinage law of 1803 took its ratio from this earlier ordinance of 1785, enacting that 200 francs silver should be coined from the kilogram cf silver ^ fine, while 3,100 francs gold should be coined from the kilogram of gold Jg fine. Since the beginning of the present century the ratio has become stiU more favourable to gold, and, as a rule, has gone higher than the point of 15^ : I. The cause of the higher value of gold is mainly to be found in the wars that lasted until 1815 and in the increased productiveness of the Mexican silver mines up to 1810. There was at the same time a distinct decrease in the production of gold in Brazil. When peace was re-established, the resumption of specie payments in England on a eold basis caused a strong demand for gold, andtlio ratio rose to nearly 16 : 1. From that time until 1850 the average yearly ratio fluc- tuated between 15.95 : 1 and l.'i.62 : 1, so that, for this period also, a fair degree of stabiUty existed. A fall in the value of gold was ajit to take place in those years in which England needed unusually large imports of grain, which were paid for by remittances of gold to the Continent. That the value of gold did not rise higher during this time was the result of the increased production of gold in Eussia, which afforded a much-needed substitute for the decrease in the i>roduction of Brazil, Chili, and New Granada. The discovery of the Californian and AustraUan gold fields completely revolutionized the conditions of the pro- duction of both metals. Thereafter two thirds of the value of the total product came from gold, and but one third from silver, the proportion of former times being exactly reversed. As, at the same time, the shipments of silver to East India rose considerably, there was general expecta- tion of an inevitable depreciation of gold. Chevalier's Book, which was translated into English by Cobden, maintained this opinion ; and it is true that a depreciation of gold did, to a certain extent, set in. The price of silver, which had averaged 59J pence in the period from 1831 to 1850, rose in January 1859 to 62J pence, and averaged, during the decades 1851-1870, 61^ pence. But the most important cause of this rise in the price of silver was not the excessive supply of new gold, but the state of trade with India, which caused, especially during the American civil war, a strong demand for silver. That the price of silver did not rise considerably higher was the result, as is well known, of the double standard — or, better, the alter- nate standard — of the Latin Union, which caused a large part of the new gold to be brought to Paris and Brussels for coinage, replacing silver coins. In the period from 1851 to 1870 over 6,000 millions of francs in gold were coined. Between 1867 and 1872 the average ratio became a very little higher than 15^ : 1, in favour of gold. Beginning with 1873, the ratio changed still further in favour of gold. This is the event, analogous to the phenomena of the years 1620-165(1, which has attracted so much attention from Governments, economists, and busi- ness men. We have already given, in our general tables, the aver- age price of silver for recent years. We add here certain tables of the highest, lowest, and average prices of each year since 1876, giving both Paris and London quo- tations : — Apr. XVI. Price of Silver in Paris according to CI6ment Juglar. Price of Silver in London according to Pixley and Abell. lears. Prime ou Perte p. 1,000 fcs. Pence pr. Ounce Stand. Gold. Silver. Highest Price. Lowest Price. Average Max. Min. Average. Max. Min. Average. Price. 1876 pair } perte 1 perte 226 perte 35 perte 130 perte 68i 46i 631 1877 1 prime 1 „ pair 110 „ 35 „ 72i „ 58i 5Si UH 1878 24 „ pair 1-i prime 170 „ 98 „ 131 „ 66i 495 52/c 1879 6 „ 3 176 „ 100 „ 137-J „ 63J 48J 51i 1880 7 ,. „ Si „ 135 „ 117 „ 126 „ 521 611 62i 1881 7 „ 3 prime a „ 1« „ 115 „ 127i „ 521 SOi 6ia 1882 4 pair 2 „ 160 „ 129 „ 14AI „ SZtV 50 511 1883 3 ,, IS „ 167 „ 146 „ 156^ „ 51* • 60 50A 1881 a ., 1 prime 2J „ 162 „ 165 „ 158J „ 61J m SOi 1883 8 pair 2J „ 230 „ 165 „ 192J „ 50 46J 481 1886 (first six months). 1 ., ■" i .. 260 „ 215 „ S32i „ 46f5 44H 46iV The price of silver in August 1886 was 42yj- pence per ounce standard (eqtiivalent to 125 marks per kilogram fine silver). This price, compared to the average price of the 60 years from 1821 to 1870, namely, 60f pence (equivalent to 179 marks per kilogram fine), shows a fall of 18^^ pence, or 30.2 per cent. In comparison with the highest price of silver, 62| pence (equivalent to 186 marks per kilogram fine), reached in the year 1859, it shows a fall of 36.6 per cent. In the countries where the silver standard exists, as in British India, this change is considered, not a fall in silver, but a rise in gold. In July 1872 one tolah of gold was sold for 17 rupees, indicating a ratio of 15.58 : while •12,830 : 200,160 = 1 15.s, X 2 16 ROYAL COMMISSION ON GOLD i^ND SILVER : App. XVI. in December 1886 one tolah cost 22 rupees 2 annas, indicating a ratio of 20.22. The price of gold had risen 30.16 per cent. It is not within the scope of the present publication to undertake a detailed consideration of the causes of the depreciation of silver since 1873, our object being to present nothing more than materials. There is a close connexion between the views and proposals on the silver question, and the legislative measures of the particular countries, on the one hand, and on the other hand, the opinions as to the cause of the depreciation of silver and the expectations as to its future price. Matters are now in a state of transi- tion, and statistics cannot be brought to a proper close. III.— CONSUMPTION OF THE PRECIOUS METALS. The prod uction of the precious metals has to be compared with their consumption, or use; the statistics of the latter are equally importa:it. In general, there are three kinds of consumption of gold or silver in civilized countries : First, coinage and other monetary use; second, consump- tion in the arts, for ornament, and for various purposes in industry, in manufactures in the fine arts — all to be included under the term "industrial use"; third, net export to regions outside the civihzed countries. Over and above these various kinds of consumption, we assumed in earlier publications the existence of a " latent reserve " in the possession of civilized countries. We were compelled to resort to this expedient in order to explain the discrepancies which appear for specific periods between the production of gold and its use, a discrepancy which remained after the most careful investigation. By this term " latent reserve " we mean those quantities of the precious metals which are neither in circulation nor a reserve for credit obligations, which are not used as plate, ornaments, or for any direct use, but are retained for the time being without any real use. In this category we must place coins no longer legal tender in the hands of private persons, relics of coin in countries having a depreciated paper money, hoards of coin in general, and articles of gold or silver which are not used, and are kept more or less hidden. This latent reserve is, of course, not a fixed amount, but increases or decreases in every country from time to time. As industrial conditions change, new amounts flow into it, or are taken out of it, for circulation or for use in the arts. The coin in the hands of mine owners or of speculators belongs, for the time being, to the same category. 1. Coinages. Germany. Austro-HuDgary. Russia. Tears. Silver. Gold. Silver. Gold. Silver. Gold. Currency. Small Coins. 1867 .... M. 164,874 M. 13,863,931 Gulden. Gulden, 1,149,619 Roubles, ca. 20,000,000 Roubles, ca. 4,000,000 Roubles. 1858 .... 6,366,735 25,210,576 5,395,635^ 62,834,972 ^ 67.130,946 „ 20,000,000 „ 4,000,000 — 1859 .... 2,841,822 83,607,142 10,299,644^ „ 20,000,000 .. 4,000,000 — 1860 .... 1.150,242 88,369,865 8,277,768 35,819,172 18,597,000 650,000 3,850,000 1861 ■ - - - 574,695 82,726,743 9,360,666 21,467,054 18,354,000 137,000 6,000.000 1862 675,190 45,377,638 7,373,133 12,214,191 31,770,000 43.000 8,000,000 1863 ..... 781,1.W 22,660,400 16,400,154 11,516,064 36,285,000 25,000 5,925,000 1864 .... 3,542,203 20,907,062 6,264,966 15,110,406 20,070,000 148,000 6,005,000 1865 .... 408,856 21,561,468 4.326,173 9,714,725 20,085,000 136,000 8,013,000 1866 .... 9,067,464 89,768,960 4,281,838 7.615,977 20,069,600 130,125 3,226,003 1867 .... 2,471,211 113,191,606 5,732,936 7,767,137 20,671,688 450,068 5,032,641 1868 .... 2,725,937 26,832,088 6,659,962 9.416,208 17,610.015 800,005 4,000,002 1869 .... - 19,745,025 3,138,917 1,987,724 20.626,895 300,006 5,900,960 1870 .... 146,685 19,515,106 3,940,720 5,453,655 28,368,016 400,009 5,000,003 1871 .... 68,850 31,925,737 6,568,948 8,390,514 4,800,024 900,005 6,220,498 1872 .... 426,542,730 e,160,*il 6,783,378 8,624,216 12,669,025 1,000,006 3,600,001 1873 .... 690,294,290 2,360,296 5,169 903 11,156,180 15,687,956 700,007 4,601,002 1874 .... 93,607,380 46,331,621 4,308,948 9,936.833 25,554,315 700,005 4,276,002 187B .... 166,420,600 114,558,995 3,962,242 14.315.663 21,609,025 700,005 4,400.002 1876 .... 159,424,600 211,080,189 6,086,876 18,972,053 30,189,040 6.or .011 1877 .... 112,539,600 46,223,000 7,724,193 18.859,863 33,150,024 10,747.007 1878 .... 124,970,080 6,566,800 5,396,000 28,827,000 34,682,048 18.301.264 1879 .... 48,387,060 453,400 5,146,000 66.877.791 36,126,040 8,354,986 1880 .... 27,992,240 4.631,700 5,102,397 17.311,482 31,300,056 7,515,268 1881 .... 15,521,220-J 16,000,400 r 6,036,268 22,238,107 27,144,061 3,608,025 1882 .... 13,307,080) (.6,870,619 7,787,580 22,735,045 436,012 1883 .... 88,287,470 2,497,760 6,423,042 13,884,878 30,407,066 3.377,881 1884 .... 67,661,740 480,800 6,101,644 10,34«,094 23,126,038 1,646,012 188B - - . . 8,148,920 2,428,879 6,792,445 8,606,102 26,802,088 1,250,022 APPENDIX. 1G.3 Up to the close of 1885 the German Empire coined and withdrew from circulation coins as follows :- Arr. XVI. Gold Coins. Doppelkronen, coined Kronen „ Half Kronen Total gold coins M. 1,466,450,300 Withdrawn 455,745,300 27,969,925 1,930,165,525 M. 717,120 Remain 649,680 7,995 - 1,274,695 M. 1,445,733,180 456,196,720 27,961,930 1,928,890,830 Silver Coins, 5 mark pieces, coined - - 71,653,096 AYithdrawn - 4,845 o - 102,615,678 ,, - 5,685 l It )) ' - 171,136,108 ,, - 4,439 50 pfennig piects, coined - 71,486,i;52 „ - 2,098 20 - 35,717,922.80 , - 8,000,932 Total silver coins - - 462,609,356.80 - 8,017,872 Remain 71,648,250 102,610,120 171,131,669 71,484,454 27,716,990.80 444,491,483.80 Of nickel coins (pieces of 10 and 6 pfennigs) there were coined, 35,160,344"45 marks; withdrawn, 521 '60 marks, leaving 35,169,822 -95 marks in circulation. Of copper coins (pieces of 2 and 1 pfennigs) there were coined 9,682,671 '58 marks; withdrawn, 32 '99 marks, leaving 9,682,638 "69 marks in circulation. France. Belgium. Italy. Tears. I Gold. Silver Currency. Gold. Silver Currency. Gold. 1 Silver, 5 Lire Pieces. Francs. Francs. Francs. Francs. Lire. 1851 269,709,570 69,327,309 , — 18,639,610 9,176,600 1,828,460 1852 27,028,370 71,918,446 — 23,023,380 2,997,600 2,438,410 1863 312,964,020 20,099,488 — 12,132,990 3,693,260 977,270 1854 526,528,200 2,123,887 — — 3,777,130 1,790,675 1865 «7,427,820 26,500,306 — — 3,820,600 680,850 1856 508,281,995 64,422,214 — — 3,516,920 470,836 18-57 572,561,225 3,809,611 — — 2,691,290 270,700 1858 4«8,689,635 8,663,569 — 90,610 5,604,470 203,005 1859 702,697,790 8,401,814 — — 12,811,500 312,000 1860 428,452,425 8,084.199 — — 5,663,910 296,270 1861 98,216,400 2,618,060 — — 3,648,040 863,235 1863 214,241,990 2,519,398 — — 39,097,660 964,436 1863 210,230,640 329,610 — — 66,026,300 — 1864 273,843,765 7,296,610 — — 12,172,600 601,955 1865 161,886,835 485,670 20,622,060 4,536,800 68,705,190 4,010,835 1866 365,082,925 189,465 10,639,260 — 3,926,020 2,351,760 1867 198,579,510 64,061,660 26,826,140 18,465,720 6,625,830 — 1868 - - - 340,076,685 93,620,560 27,634,980 32,852,820 6,807,940 — 1869 234,186,190 68,264,286 24,689,480 63,287,710 3,707,100 19,976,230 1870 55,394,800 53,648,350 63,824,060 62,340,375 1,095,100 29,845,780 1871 60,169,880 4,710,905 45,179,440 23,917,170 470,160 36,000,195 1872 889,190 — 10,226,000 66,100 35,611,920 1873 154,649,045 — 111,704,796 20,404,140 42,273,935 1874 24,319,700 69,996,010 60,927,000 12,000,000 5,919,420 60,000,000 1875 234,912,000 75,000,000 82,685,060 14,904,705 2,244,440 50,000,000 187G 176,493,160 62,661,315 41,393,640 10,799,426 2,164,660 31,951,715 1877 255,181,140 16,464,285 118,121,400 — 4,947,960 22,048,285 1878 185,318,100 1,821,420 61,108,000 — 6,345,280 9,000,000 1879 24,610,640 — — — 2,929,320 20,000,000 1880 - - - — — — — 2,590,660 — 1881 - - - 2,167,000 — - 16,860,560 - 1882 3,742,000 — 10,446,200 — 139,523,040 — 1883 - - - _ — — 4,067,500 — 1884 — — 322,100 — 1885 - - - 289,400 — — — 3,294,680 J 06 KOVAL COKMISSION (X\ GOLD AND SILVER : Api'. XVI. The coinage of subsidiary silver in France, Belgium, and Italy was- Franck. 1865 1866 1867 1868 1869 1870 1871 1872 1881 1882 1883-85 1862 1853 1868 1866 1867 Belgium. Francs. 8,736,725 44,631,944 59,706,980 35,824,718 9,911,612 16,402,906 19,167,595 26,449,180 6,733,445 1,159,860 Franca. 60,128 393,011 173,050 10,328,000 14,737,000 1868 1869 1880 1881 1882-85 1862 1863 1864 1865 1866 1867 1868 1881 1882 1883 1884 1885 Italy. Francs. 6,541,392 1,393,608 780,516 219,484 Lire. 1,133,860 32,082,874 30,696,351 41,937,107 33,501,071 16,530,146 1,252,462 8,281,588 , 5,718,412 7,005,420 10,994,580 697,546 The total coinages of the States of the Latin Union in coins of the franc system amounted, from the beginning of 1851 to the close of 1885, to— Countries. France Itnly^ Belgium Switzerland ■{ Periods. From 1851 to 1865 „ 1866 „ 1885 „ 1851 „ 1865 „ 1866 „ 1885 „ 1851 „ 1866 „ 1866 „ 1885 „ 1851 „ 1865 „ 1866 „ 1885 Gold Coins. Francs. 6,242,760,680 2,150,623,030 243,090,860 233,202,210 20,622,060 663,474,660 6,000,000 Silver Currency. Silver Small Coins. Francs. 275,500,181 625,466,380 15,707.915 369,069,820 58,323,290 360,497,720 2,500,000 7,978,260 Francs. 8,736,725 218,988,240 105,850,192 83,981,125 626,189 33,000,000 18,000,000 • In the Anneje to the Protocol of the seventh sitting of the Conference on Coinage of 1886, the Italian coinaeea from 1866 to 1885 wp™ ufatort ot 238,220,245 lire gold and 369,681,360 Mre in silver five lire pieces. =6 um iooo m loao were statea at Teais.' 1851 1862 186S 1864 1865 1856 1857 1868 1869 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1876 1876 1877 1878 1879 1880 1881 1882 1883 1881 1885 Great Britain. Gold. Silver. Australia. Gold. £ 4,400,411 8,742,270 11,962,391 4,162,183 9,008,663 6,002,114 4,859,860 1,231,023 2,649,509 3,121,709 8,190,170 7,836,413 6,997,212 9,636,597 2,367,614 6,076,676 496,.397 1,653,384 7,372,204 2,313,384 9,919,656 16,261,442 3,384,663 1,461,565 243,264 4,696,648 981,468 2,265,069 86,060 4,160,052 1,403,718 2,324,015 2,973,463 £ 87,868 189,696 701,544 140,480 195,510 462,528 373,230 445,896 647,064 218,403 209,484 148,618 161,172 635,194 601,732 493,416 193,842 301,366 76,428 336,798 701,514 1,243,836 1,081,674 890,604 504,000 222,351 420,948 613,998 649,064 761,608 997,128 209,880 1,274,328 668,648 720,918 612,500 1,220,000 767,600 1,343,000 1,221,000 1,651,600 1,719,260 2,477,500 1,634,760 2,698,600 2,271,500 2,911,000 2,401,000 2,819,000 1,279,000 1,220,000 2,814,000 2,741,000 2,312,600 3,398,000 4,010,000 3,767,000 3,117,000 3,493,000 4,163,000 4,651,800 3,736,800 3,843,000 3,268,000 4,561,000 4,468,000 United States. Gold. Silver. Netherlandg.t Silver. Bi)llars. 62,614i492i 56,846,1874 39,377,909 26,916,918i 28,977,968 36,697,768J 16,811,663 30,263,725i 17,296,077 16,445,476 60,693,237 45,5S2,386i Dollars. 774.897 999,410 9,077,671 8,619,270 3.601,246 6.135,240 1,477,000 8,040,730 6,187,400 2,769,920 2.605,700 2.812,401 20,696.862 1,174,093 21,649.346 648,214 25,107,217i 686,308 28,313,946 680,261 28,217,187i 986,871 18,114,426 1,136,760 21,828,6S7i 840,746 22,257,3124 1,767,264 21,302,476 1,956,905 20,376,495 3,029,834 36,249,3374 2,946,795 60,442,690 6,983,601 33,6E3,965 10,070,368 38,178,9624 19,126,603 44,078,199 28,649,935 62,798,980 28,290,826 40,986,912 27,227,883 56,167,735 27,942,487 78,733,864 27.649,967 89,413,4474 27,783,389 35,936.9274 28.835.470 27,932,824 28,773,388 24,861,1234 28,848,960 Gulden. 11,366,910 1,361,115 18,668,549 12,243,588 7,628,024 14,011,102 31,495,187 15,103,956 9,464,894 10,269,620 10,361,083 10,841,786 10,684,946 12,120,785 10,610,193 12,372,115 12,132,133 12,740,480 16,596,618 17,187,587 33,640,945 13,787,682 31,989,315 ' J*"" the United States the financial year ending June SO is reckoned. f For gold coinage and small silver coinage in the Netherlands, tee the " Remarks.' APPENDIX. 167 The coinage of gold and silver in the United Kingdom In addition to this there were coined for the East Indian App. XVI. 1851-60 1861-70 1871-80 1K81-85 Gold. 56,120,133 51,839,051 42,398,782 6,701,181 Colonies : — 1882 1883 1884 1885 Gulden Pieces. - 750,000 - 355,000 - 82,500 Silver. 1851-60 1861-70 1871-80 1881-85 3,462,119 2,957,940 7,079,490 3,860,802 The Bank of England has withdrawn from circulation worn silver coins as follows : — £ 320,000 1867-70 1871-80 1881-85 1,648,000 844,000 Worn silver has also been withdrawn in other ways during this time. In Australia the Mint at Sydney began operations on May 15, 1855, and the Mint at Melbourne on June 12, 1872. These are considered as branches of the Royal Mint at London, and the Australian coins are always treated as British coins. From the opening of the Mints until the close of 1885 there was coined in Australia gold as follows : — At .Sydney, 52,460,000?. ; at Melbourne, 29,311,100/. The tables given above include the total coinage of the silver in the United States, legal tender dollars, trade dol- lars, and subsidiary coins. The trade dollars contain 378 grains of fine silver, and were originally intended only for use in the trade with the East, but they afterwards came into circulation within the country, nnd in recent years have been in the main withdrawn. The total coinage of silver may be divided as follows into the three classes of silver dollars, subsidiary coins, and trade dollars : — Financial Tears. Currency, Silver Dollars. Small Silver Coins. Trade Dollars. 1878 1879 - Dollars. 8,673,500 27,227,600 Dollars. 8,339,315 382 Dollars. In the years, 1874-1878 : Total 35,959,360 1880 - 27,933,750 8,687 1881 - 27,637,955 12,012 1882 • 27,772,075 11,314, 1833 28,111,119 734,351 1884 - 28,099,930 673,438 1885 - 28,528,552 320,408 For the Netherlands the table (on p. 166) states for the years 1851-1870 the total coinage of silver; for 1871-1874 only the coinage of legal-tender silver. Since 1875 there has been no legal-tender coinage of silver whatever. The subsidiary coins of the denominations of 5 and 10 cents have been coined as follows : — 1871 1873 1874 1876 1877 1878 1879 1880 1881 1882 1884 1885 Gulden. 100,000 100,000 100,000 110,000 100,000 100,000 110,000 100,000 200,000 200,000 100,000 200,000 1882 1883 1884 1885 I Gulden Pieces. - 550,000 - 200,000 - 437,500 The gold coined in the Netherlands has been as below. Excluded from the figures are the ducats and the Wilhehii- d'or, which are trade coins (ducats in 1871-1885, 387,324 pieces; Wilhelmd'or in 1851-1853, 2,676 pieces double, 10,000 pieces single, and 10,000 half pieces). The coinage of legal-tender 10-gulden pieces was : — 1875 1876 1877 1878 1879 1880 188r 1882 > 41,110,000 Gulden 15,811,060 11,081,490 5,810,360 501,000 Nothing. 670,950 Gulden. 1883 1884 j 1885 Of legal-tender silver there were coined, according to the provisions of the coinage law of 1839, about 461,000,000 gulden up to the close of this coinage. It turned out later that by far the largest part of these coins, more than 300,000,000, had been exported. Of gold coins the total hitherto has been 74,984,860 gulden, of which, howe\'er, but a comparatively small part I'emained at the close of 1880 within the country. It is worth noting that the silver for subsidiary coins issued since 1882 has been obtained by melting down the pieces of 24 gulden, and not by the purchase of bullion. An Act of March 4, 1884, authorises the Government, in case the gold held by the bank should become considerably reduced, to melt down 25,000,000 of legal-tender silver gulden and by their sale to secure gold. The coinage in Denmark, Sweden, and Norway, since the adoption of the single gold standard, has been : — To 31st December 1880. From 1st January 1881 to Slot December 1885. Total. Gold. Denmark Sweden Norway Kronen. 34,754,640 38,872,440 13,127,610 Kronen. 6,989,175 719,060 Kronen. 34,754,640 45,861,615 13,840,670 Total - 86,754,690 7,708,235 94,462,926 Silver. Denmark Sweden Norway 18,148,230 12,627,659-) 4,740,6oJ 207,557 714 ,726 18,356,787 21,082,786 Total - 36,516,289 3,9283 39.488,572 In Finland there were coined up to the close of 1885, 21,900,000 marks gold and 13,189,750 marks silver. Coinage in Spain has been from 1876 to the close of 1885— Pesetas. In gold In sih er 5 peseta pieces In silver small coin 921,654,890 411,643,030 185,556,188 168 EOYAL COMMISSION ON GOLD AND SILVER Ai>p. XVI. In the years 1882-85 there were coined— 1882 1S83 1881 1885 Gold Coins. Pesetas. 10,343,575 16,721,426 25,818,700 12,565,325 Silver Five Peseta Pieces. Pesetas. 8,3U!),680 27,537,295 29,239,095 15,722,240 Silver Small Coin. Pesetas. 46,984,838 15,082,249 5,677,864 3,336,382 Portugal coined between 1854 and the close of 1882 6,073,002 milreis of gold and 8,817,436 subsidiary coin. Since 1882 the coinage has been- Years. Gold. Copper Subsifliary Coin. 1883 1884 1885 Milreis. 201,000 173,000 228,030 Milries. 616,160 454,650 460,850 For Greece, Roumania, and Servia, foreign mints coined, on the franc system, the followinjf amounts : — Gold Coinage. Silver Five Franc Pieces. Silver Small Coin. Greece - Francs. 12,000,000 Francs. 16,462,865 Francs. 10,800,000 Iloumania 3,806,000 47,700,000 30,500,000 Servia - 10,000,000 1,000,000 3,600,000 No trustworthy conclusions can be reached as to the present production of the precious metals, or as to the production in the immediate jiast, by adding together the coinages of the difierent countries. Account must be taken of the coins withdrawn by various States, such coins being generally re-coined. In most countries material for silver coins has been* obtained in recent times mainly by melting down older coins. For instance, (Jerinany re-coined between 18/2 and 1879, about 2,200,000 kilograms of silver, and Italy re-coined, from 1862 to 1883, about 2,600,000 kilograms of silver. The same process took place in England between 1867 and 1886, involving nearly 3,000,O00L of the older English silver coins. Coinage in Mexico and the South American States is in the main simply a means for levying a tax on the domestic production of silver ; and the piasters and pesos of those countries are to be treated as merchandise. The coinage of half imperials in Russia is quite needless, since a depreciated paper money is in circulation, and the large annual payments of gold tor interest abroad could be met as easily and as cheaply by gold bars as by half im- perials. Between 1851 and 1885 there were coined in Russia 806,000,000 of roubles in half imperials (=967,025 kilograms gold fine). A very small proportion of this amount can have escaped being melted down in foreign countries. Large quantities of the gold coins of other States also, coined originally for domestic use, havp been melted down and re-coined at foreign mints, as is almndantly proved by the records of those mints. The supply of coin within the country, therefore, can be ascertained from its coinage statistics only if account be taken of the proved or probable re-coinage abroad, and of the probable use in the arts. The case is different with subsidiary coins, since there can be no exportation or melting down of these. The value of the gold and silver coined in the more im- portant civihzed countries was as follows : — A. — According to Countries. reriod. Gold Thousand Mark. Silver nominal A'alue a<'Oordiiif! to Tliou>and Mark. Relative Value Per Cent. Countries. Gold Per Cent. Silver Per Cent. Great Britain and Australia - 1S61-1886 4,879,302 36l),S.S3 93,1 0,9 United States . . . - - 1851-1886 5,345,133 ],4r!S.497 78,1 12 France ....-- 18.-,1-18S5 6,988,560 91t,210 80,7 3-3 lielgium ------ 1851-1886 47.3,037 368,382 66,3 43,1 U.iiy 1851-1883 385,797 4j7,323 46,8 54,2 Netherlands - - - - - 1861-1885 131,605 678,608 18,5 81,5 Germany - - - . - 1857-1885 1,969,881 1,16.3,733 62,, 37,3 Austro-Hungary - - . - 1857-1886 341,824 1,025.784 26,0 75,0 Russia ------ 1861-1885 2,716,314 586,060 82,3 17.7 Scandinavian States - - - - 1873-1886 103,168 42,694 71,4 28,,; Spain ..-..- 1876-1885 746,541 483,731 60,7 39,3 Portugal ------ 1854-1886 30,278 36,372 45,1 64,c Total . - . . (1851-1886) 23,104,429 7,606,199 75,5 21.5 B. — According to Periods. Periods. Gold Thousand Mark. Silver nominal Value according to Thousand Mark. Relative V.ilue Per Cent. Gold Per Cent. Silver Per Cent. 1861-1866 3,331,106 467,680 87„ 12,1 1866-1860 3,587,387 922.290 79,5 20,5 1861-1866 3,130,764 707,430 81,0 18,4 1868-1870 2.578,198 1,172,180 68.7 31,3 1871-1875 3,791,344 1,387,908 73.J 26,8 1876-1880 3,888,634 1,738,499 69,1 30,3 1881-1885 2,796,996 1.120.S12 71,. 23,6 1861-1885 23,104,429 7,506,199 75,5 24,5 APPENDIX. 169 The preceding tables, from which the very large coinage in Mexico and British India is intentionally excluded, represent in weight of fine metal about 8,281,000 kilo- grams of gold and ^2,000,000 kilograms of silver, whereas the total production of the precious metals in the period 1851-85 may be estimated at 6,-100,000 kilograms of gold and 57,600,000 kilograms of silver. As already stated, a considerable part of the coinage consists in the re-coinage of older coins. Yet, even when this is taken into con- sideration, there remains no doubt that in the last 34 years very large parts of the gold and silver coined in civilized countries, have been melted down or exported to the East, and have thereby disappeared from the monetary supply of the civilized countries. Abrasion of Coins. The loss which the monetary supply of the precious metals suffers from the abrasion of coins is constant and inevitable. Yet it is by no means so important as was assumed in former statistical compilations. W. Jacob estimated it for gold coins at ^ of 1 per cent, per year; for silver coins as high as f of 1 per cent, per year ; and he be- lieved that, starting with an assumption (quite arbitrary) as to the probable supply of the jwecious metals at the time of the Emperor Vespasian, he could calculate the loss from that time up to the discovery of America. Careful investigations have been repeatedly made on this point in modern times, the results of which we have collected and published, and which show that the loss from abrasion is comparatively insignificant. This is partioularlv true at the present time, in consequence of improvements in coinage and the development of banking, more especially for those large gold coins which form the great mass of the general monetary supply of gold. Extended investigations in France and in Switzerland have shown that the average annual loss through abrasion on 20-franc pieces is about \ per 1,000, and exact weighings of large sums of German double-crowns, which had been several years in circulation, showed an annual loss of only ^ per thousand. That is to say, on the average 35 years must elapse before gold pieces lose one-half of their original standard weight. After the first years of circulation, when the coinage marks are already somewhat smoothed off, the abrasion naturally becomes less. On the other hand, smaller gold coins suffer more from abrasion, since the space which they present is com- paratively larger, and they pass more frequently from hand to hand. The question of the abrasion of gold coins has latterly attracted much attention in England and has led to repeated careful investigations, which seem to indicate that the opinion just expressed of the slight importance of this consumption of gold must be modified. The Bank of England, as is well known, weighs every gold coin pre- sented to it, and cancels those under weight. The con- sequence is that gold coins which are nearly under weight are rarely presented to the bank, but remain in circulation indefinitely, and constantly lose more and more in weight. Mr. Jevons calculated, on the basis of actual weighings, that the annual average abrasion of the sovereigns in circulation amounted to one third to one fourth per thou- sand, while that of half sovereigns was more than one per thousand ; and he concluded that a very considerable proportion of the gold coins circulating in the United Kingdom were under weight. Later investigations, especially those made by Mr. J. B. Martin in 1882, have confirmed this conclusion. It will be remembered that the Chancellor of the Exchequer last year openly admitted the need of a general recoinage of the smaller gold coins, and proposed as a means of covering the expenses of the operation and of the future maintenance of the standard, the reduction of the half-soverigns to the status of subsidiary coins, making them legal tender only for sums up to 51. This proposal met with little favour, and is not likely to be carried out. The investigations just referred to indicate that of a total circulation in the United Kingdom (exclusive of what is in the Bank of England) of about 80,000,000/. sovereigns and 20,000,000/. half-sovereigns, about 44,000,000/. sovereigns and 11,000,000/. in half-sovereigns have become under weight. Messrs. Jevons and Fremantle put the annual loss by abrasion at 22,000/. for the sovereigns and 13,000/. for the half-sovereigns. The withdrawal and recoinage of the underweight pieces therefore would involve a considerable loss. It must be remembered, however, that the loss of actual gold would probably be diminished hy the fact that some overweight coins were melted down at the outset by private individuals, and that a certain loss in weight of the coins is the result of clipping, and therefore causes no real diminution in the supply of gold. The comparison of the underweight coins, therefore, 54648. with the regular standard does not represent a complete loss. Taking all things into consideration, we believe that we may adhere to the conclusion that the annual loss by abrasion on the total monetary supply of 13 milliards of marks gold m civilized countries is certainly not more than 700 to 800 kilograms gold. The diminution of the supply of the precious metals by accidental losses may be left out of account; for it is likely to be compensated by the discovery of sums formerly concealed, of which in many cases nothing is heard, and which at all events are not considered in the statistics of the production of the metals. The loss which silver suffers through abrasion, especially in the case of subsidiary coins, is for obvious reasons much greater than in the case of gold coins. Yet it is by no means so large as was formerly supposed. If it were set as high as 50,000 kilograms per year in civilized countries, all accidental losses included, the estimate would probably be too high rather than too low, and this sum is not 2 per cent, of the jiresent annual production of silver. As a proof of the great interest which is felt in England in regard to the protection of their coins from abrasion, we mention the following careful investigations which have appeared in recent years on this subject (in the Institute of Bankers in London)—" Our Gold Coinage : An Inquiry into its present defective Condition, &c." By J. Biddulph Martin —Journal of the Institute, June 1882. "The Deficiency of Weight in our Gold Coinage." By R. H. Inglis Palgrave — Journal, March 1883. " Seniorage and Mint Charges." By J. B. Martin— Journal, April 1884. "The Gold Coinage : Position of Matters at the Present Time." By R. H. Inglis Palgrave — Journal, December 1884 2. Consumption op the Precious Metals in the Arts. The use of the precious metals as money has always been by far their most important use in civilized countries, and has been the foundation of their great value. Side by side with it, however, has continued their use for plate, for ornament, and for various purposes in the arts. The transition from one use to another has been constant. Large quantities of coins and bars are contiiwally with- drawn from use as money ; and on the other hand, gold and silver plate and ornament are frequently melted in order to be turned into money. In due course of time we shall give an approximate estimate of the present monetary supply of the civilized countries ; but we shall not venture to give an estimate of the probable supply of gold and silver plate and ornament in the world at large, or in individual countries. But it is worth while to try to ascertain the annual use of gold and silver in civilized countries in the arts, including theii' use in the fine arts, for ornament, for plate, and in the arts at large, although it is exceedingly difficult to calculate, and ascertainable only with wide limits of error ; for it is connected with points of essential importance in the question of standards. Four years ago we published a statistical investigation of this subject in an article entitled " The Consumption ot Gold and Silver "("J ahrbiioher fiir National-bkonomie," new series. Vol. III.). We treated the subject with all the care possible in the face of the lack of materials ; and the estimates then made by us have been frequently cited. We had hoped that other, more detailed, estimates would be added, but this hope remains as yet unfulfilled, except ill the investigations which Mr. Burchard, of the United States Mint, made in recent years on the increasing use of the precious metals in the arts of the United States. Not- withstanding the uncertainty of these estimates, recent in- vestigations have nevertheless made it plain that this com- sumption of the precious metals is considerably larger than had before been supposed. In no country have the statistics on the use of the precious metals in the arts been so carefully handled as in the United States. In the fiscal year 1878-79 all manu- facturers who could be supposed to use gold or silver for plate, jewelry, watch cases, plating, or in chemical processes, were asked by circular letters to give informa- tion as to the extent and character of their consumption. Answers were obtained to 1,401 out of 3,506 letters, 448 answers giving the desired information. Mr. Burchard beheved that from this and other sources he could estimate the annual consumption of gold at 7,000,000 dollars and the annual consumption of silver at 5,000,000 dollars. In his annual report for 1883-84 he says : — " In order to obtain fuller information in regard to the use of the precious metals in the arts, circular letters were again sent to all persons and firms on whose part a con- sumption might be expected. The number of these letters Arp. XVI. 170 ROYAL COMMISSION ON GOLD AND SILVER : App. XVI. was 7,969. Answers were received to 5,418 letters, from which it appeared that 2,734 persons or firms used gold to the value of 14,500,000 dollars (21,800 kilograms fine) and silver to the value of 5,500,000 dollars (132,000 kilograms fine)." The superintendent of the assay office in New York reports that the value of the bars delivered during the fiscal year 1883 for presumable uses in the arts was, gold 4,616,118 dollars and silver 5,205,996 dollars. The value of the precious metals used by manufacturers in the form of stamped United States or refinery bars was 7,137,711 dollars gold and 4,551,172 dollars silver. This seems to indicate an increase in the consumption of gold and silver in the arts, especially in the form of United States gold coins and stamped United States or refinery bars. It seems probable that in the year 1883 6,000,000 dollars gold and 4,500,000 dollars silver were taken from the domestic pro'duction for use in the arts. We give below a more detailed statement of the indus- trial use of the precious metals in the United States for 1883, indicating both the form in which the metal was consumed and the purpose for which it was used. The tables are taken from Mr. Burchard's reports. Statement showing the Valub and Charactee of the Gold and Silver used in the Arts and Manufactures during the Calendar Year 1883, as reported by the Persons and Firms who had been addressed. Gold. Manufactures. Number manufac- turing. United States Coins. Stamped United States or Refinery Bars. Old Jewelry, Plate, and other old Material. Foreign Coin. Native Grains, Nuggets, Wire or Rolled Plate. Total Gold. Watch oases 32 Dollars. 676,812 Dollars. 2,976,650 Dollars. 38,101 Dollars. 1,608 Dollars. 620 Dollars. 5.817 Dollars. 3,698,308 Watch chains 14 374,997 286,884 1,907 600 135,410 27,202 827,000 Dental supplies - 1 700 33,437 3,775 - - - 37,912 Pens . . - - 14 14,678 90,325 6,100 6,227 2,134 27,560 145,924 Instruments 45 68 - 3,668 - 621 942 6,199 Leaf .... 51 178,424 792,661 57,498 6,816 6,700 42,835 1.084,824 Plate .... 21§ 379,291 67,923 6,500 690 8,933 66,626 628.868 Spectacles 41 192,400 7,169 8,830 1,315 4,987 727 215.428 Chemicals 27 7,438 7,685 3,651 650 207 12,180 31.611 Jewelry and watchmaker's supplies. 11 24,498 13,983 9.123 — 1,569 30,064 79.227 Jewelry and watches - 2,273 3,125,738 2,861,149 738,688 177,794 541,306 468,745 7,905,163 Total 2,734 4,876,587 7,137,661 876,641 194,400 702,387 672,688 14,459,464 Silver. Manufactures. United States Coin, Stamped United States or Refinery Rars. Old Jewelry, Plate, and other old Material, Foreign Coin. Native Grains, Nuggets, c. Wire or Rolled Plate. Total Silver. Total Gold and Silver. Watch cases Dollars. 36,200 Dollars. 1,777,193 Dollars. 31,937 Dollars. 219 Dollars. 1,000 Dollars. 50 Dollars. , 1,846,699 Dollars. 5,443,907 Watch chains ' 524 14,768 - - 6,790 1,462 23,544 850,544 Dental supplies . - - 460 6,060 - - - 228 6,738 44,650 Pens .... 216 4.254 100 1,655 506 - 6,730 162,654 Instruments 931 3.752 693 755 864 6,995 13,990 19,189 Leaf .... 11 22.097 4,107 300 835 18,933 46,883 1,131,707 Plate .... 16.856 1.710.616 40,761 7,690 8,495 281,977 2.066.294 2,695,162 Spectacles 3,631 16,401 1,254 205 250 1,981 23.782 239,210 Chemicals ... 9 375,429 36,664 600 1,580 3,347 416.419 41S,030 Jewelry and watchmaker's supplies. 245 4,800 800 — 1.505 975 8,331 87,568 Jewelry and watches ■ 158,664 616,287 106,745 142,949 49,733 23,992 1,098.220 9,1)0:5,383 Total 216,6;j7 4,562,172 221,951 164,273 71,667 339,940 6,668,630 20,015,994 Of the persons and firms to whom circulars were addressed 2,551 sent no answer; but it does not follow from this that they made no use whatever of the precious metals. It has therefore been thought that the con- sumption in the arts in the United States is considerably larger than the Director of the Mint states. But, on the other hand, doubt has often been expressed whether many manufacturers might not have overstated their con- sumption, in which case the computed total would exceed the actual consumption. But this doubt is officially declared to be unfounded. It is to be hoped that these inquiries will be continued, and that they will yield trust- worthy information in regard to the use of gold and silver m the arts in the United States. In regard to the consumption in other countries we state a few significant facts, referring for further informa- tion to the essays already mentioned (Jahrb. f . N O und Stat., N. r.. Vol. III., 1881). In Great Britain the tax returns indicate in recent years a use of no more than 24,000 ounces of gold and 800 000 ounces of silver for manufacturing purooses. But this is no mdication of the total consumption in the arts, since the most important uses are not subject to taxation • for mstanoe for watch cases, chains, rings, buttons, clasps, gold leaf, gildmg, gold wire. The same holds good of the use of silver In the report of the Parliamentary Commis- sion of 1876 It is estimated that 600,000?. of silver and from 260,000Z. to 50O,000Z. of gold are consumed annAallv which IS certainly too low an estimate. Inquiries at Bir' minghain, m 1881, among men of business whose iudff- ment might be trusted, led to the conclusion that the annual consumption of gold in that place was about APPENDIX. 171 300,000 ounces. An estimate putting the consumption in the arts in all forms at 20,000 kilograms gold and 90,000 kilograms silver, of which 16 and 20 per cent, respectively come from old material melted down, will certainly not be too high. Higher estimates have been made. It is to be hoped that English statisticians may not be deterred by the impossibility of getting more than approximate state- ments, from inquiries as to the present use in the arts in the United Kingdom. In regard to France the following estimates were laid before the International Monetary Conference of 1881 : — The annual consumption of gold by goldsmiths and jewellers was put at 14,000 kilograms (average .740 fine), or 35,600,000 frp,ncs. A considerable part escapes taxa- tion a, h i?, say 1), 2,800 kilograms, or 7,100,000 francs. Manufacture of medals (.916 fine) consumes 100 kilograms, or 314,000 francs. Total, 16,900 kilograms, or 43,014,000 francs. The gold used at Paris by refineries for certain kinds of gilding amounted, on the average, for the years from 1872 to 1880, to 684 kilograms fine. If we add to these sums the quantities of gold which are used in other forms, for instance, for gold leaf, gold wire, and smaller articles not subject to taxation, in regard to which we have no data, we shall find that our earlier estimate of an annual use in the arts in France of 21,000 kilograms gold and 100,000 kilograms silver (of which 20 and 25 per cent, respectively came from old materials) was not too high. The gold and silver articles declared for taxation by the Bureaux de Garantie were as follows : — Period and Tears. Gold Commo- dities. Silver Commo- dities. lSGl-70 Kg. 11,099 66,225 1871-75 10,706 64,478 1376 11,635 72,054 1877 11,191 70,398 1878 . 12,722 76,385 1879 12,407 73,795 1880 12,843 75,508 1881 14,534 82,091 1882 ■ 14,264 82,201 1883 12,771 82,235 1884 10,750 76,282 1885 9,390 74,466 Probably an addition of 20 per cent., at least, must be made for articles exported or not declared. A statement kindly furnished by the Department of Coins and Medals in March 1886 says that the gold and silver annually used in France in the arts amounts to 15,500 kilograms gold and 145,500 kilograms silver. For Bgedals there were used in the five years 1880 to 1884, on the average, 106 kilograms gold and 2,520 kilo- grams silver annually. For Switzerland we refer to the following statements made by the Swiss delegates to the International Monetary Conference of 1881. In Geneva the largest refining esta- blishment of the place had delivered 7,573 kilograms of gold of various degrees of fineness in 1880, 7,000 kilogra,ms being for Swiss use. But it had used about 3,000 kilo- grams of old gold derived from Switzerland. The remain- ing refining establishments of Geneva had delivered about 3,000 kilograms gold. On the whole, it was supposed that between 7,000 and 8,000 kilograms gold (over and above remelted material) were annually used in Geneva, having a value of 21,000,000 francs. Add about 6,000,000 francs for gold melted by the manufacturers themselves, and we have a consumption of 27,000,000 francs in Geneva alone. The consumption at Neufchatel might be put at 15,000,000 or 16,000,000 francs, of which, however, about 2,000,000 francs came from Geneva, and should be de- ducted. For the whole of Switzerland the annual use in the arts might be put at about 40,000,000 francs, or 11,600 kilograms fine gold. This estimate agrees, on the whole, with our own estimate, made five years ago, which ])ut the annual consumption of gold in the industries of Switzerland at 15,000 kilograms gross, or, after deduction made for remelting, at 11,250 kilograms net. An independent estimate has been sent us which arrives at the use of gold in Switzerland for the year 1884, as follows : — In Geneva, deliveries of the refineries (exclusive of old gold articles melted down, of sums drawn by bankers and manufacturers from abroad, and of re-exports) - - . . Add the melting of gold coin by manu- facturers .... In Geneva In Neuenburr/, industrial use estimated at Add for the Jura District in the Canton of Berne and others, approximately - Total estimated industrial use of "1 gold in Switzerland - -J Kg.f. 6,000 600 6,600 3,400 1,200 11,200 This estimate agrees upon the whole with the preceding. It should be mentioned, however, that more recent esti- mates received by us indicate that the industrial consump- tion of gold in Switzerland has become considerably smaller in the last three years. The use of the precious metals in the arts in Germany is considerable. A large part of it appears in an export of articles of gold and silver, and especially of manufactures of various kinds containing gold. We were informed that no exact statement could be given of the consumption of the precious metals by the jewellers and goldsmiths in the district of Pforzheim. In former times the number of workmen employed was a good indication of the quantity of metal consumed, but the extension of the industiy of the district to finer articles and to plated ware has caused the number of workmen to be no longer a safe indication. Estimates from persons who are in a position to judge put the average annual con- sumption at Pforzheim during the years 18/6-80 at about 3,500 kilograms fine gold, and at the same quantity of silver. An estimate for subsequent years has been sent us, and is as follows : — Kg. M. M. 1881, in fine gold 4,000 at 2,820= 11,280,000 „ „ silver 5,000 „ 155 „ 775,000 1882 „ gold 4,000 „ 2,820 „ 11,280,000 „ silver 6,000 „ 155 „ 930,000 1883 „ gold 4,000 „ 2,820 „ 11,280,000 „ silver 7,000 „ 155 „ 1,085,000 1884 „ gold 3,000 „ 2,810 „ 8,430,000 „ silver 7,000 „ 150 „ 1,050,000 This material was obtained partly from refineries of Pforzheim and other places, and partly by melting all sorts of coins, among them many 20-mark pieces. The increase in the use of silver in recent years is to be explained by the larger production of silver and of plated articles, while the decrease in the use of gold results from the fact that 134 carat articles are used less than formerly, and 8 and 18 carat articles are used more. A statement received from the Board of Trade of Pforz- heim for the year 1885 says : " The export of manufactures oC the precious metals decreased in 1885. The export of ornamental silver articles has shown a noticeable decline, which may be explained partly by a change in fashion, partly also by the over- production in England, which floods foreign markets and causes English articles to be sold almost at cost. The esti- mate of 7,000 kilograms silver for 1884 can, therefore, no longer be retained ; the quantity for 1886 does not exceed 6,000 kilograms. On the other hand, the estimate as to gold may stand. Although the year 1885 was less active than the "receding year in the production of gold articles, yet the estimate of 3,000 kilograms was a very conservative one ; and, moreover, the recent demand for handsome solid articles with genuine stones and 18-carat setting has been large.'' The annual consumption at Hanau and neighbourhood was estimated four years ago at about 3,200 kilograms gold (9,000,000 marks) and 1,400 kilograms silver (224,000 marks). For the years 1881-84 the consumption of gold fell to 2,900 kilograms, while that of silver rose. The gold consisted almost exclusively of German and foreign gold coins, only 10 per cent, coming from gold bars ; while silver is used exclusively in the form of pure metal. A recent communication says : " Since gold jewelry is made almost exclusively from gold coins, there are no means of calculating with exaet- r 2 172 T (YAL COMMISSION ON GOLD AND SILVER t Apf. XVI. less the consumption , believe that in 18*' about 10 per c export of gold i. after the increas For the gold a dorf, and in tlie a. tion was estimated grams gold and 6,, change seems to ha gold remelted in this The gold and silve consumed annually abo kilograms silver in recei diminished somewhat. t'rom year to year. We tion has again decreased ith preceding years. The ,ited States ceased entirely duty in that country." ;ries of Gmiind and Schorn- ittgart, the annual consump- ars ago at about 1,100 kilo- jgrams silver. No essential ;n place since then. The old ;t is inconsiderable. ctories of Berlin seem to have 500 kilograms gold and 12,500 years. In 1885 the consumption A considerable change has taken place during the last six years in the production of gold ornaments in the large European cities. Large massive jewels are no longer in demand, but diamonds, pearls, and lispecially rubies and sapphires, in light gold settings, are sought for. This change in fashion must have led to a decrease in the consumption of gold. Diamonds are set in silver more than in gold. The sale of jewelry has in- creased largely, but that of more expensive articles of silver has diminished. The latter circumstance is the result of the fashion of decorating tables with artistic articles in bronze. jMoreover, the improvements in the production of plated ware and the greater attention paid to modelling and chiselling, which causes plated ware to be not unfrequently of higher artistic merit than solid ware, has led to a decrease in the use of silver. The gold factories of Bremen and Hamburg inform us that their annual consumption of gold is about 64 kilo- grams. Over and above this we are informed that the present consumption of gold and silver in Hamburg is about 40 kilograms gold and 3,000 kilograms silver. Of the gold, about 10 kilograms come from Ihe refinery, 15 kilograms from coins melted down, and 15 kilograms from the remelting of gold articles. Of the silver, about 2,000 kilograms comes from the refinery and 1,000 kilograms from remelting old silver. The silver factories at Heilbronn used annually, from 1881 to 1883, 9,030 kilograms silver, and in the year 1884 alone 12,300 kilograms silver. Only 400 kilograms came from old silver remelted. The consumption of gold is no more than 15 kilograms per year. In 1885 one large factory in this place consumed 10,700 kilograms silver, in value 1,675,000 marks, and shipped abroad 700,000 marks' worth. Two silver factories at Bremen consumed : — 1881 - 1882 - 1883 - 1854 - 1885 - 10,320 kg. f. s. 10,380 „ 11,294 „ 11,900 „ 12,077 „ The use of silver in the arts is here increasing gradually. The old silver remelted amounted to no more than 300 to 430 kilograms annually. The production of silver forks and spoons has been increasing from year to year. The production of gold leaf and gold wire forms an important part of the use of the precious metals in the arts. The chief seat of this manufacture is Ntirnberg and the neighbouring country. The annual consumption of the establishments in that region for the years from 1881 to 1884 may be set between 1,100 and 1,250 kilograms fine gold and 10,500 to 12,000 kilograms fine silver. Fine gold is used almost exclusively, and is obtained from the re- fineries of Frankfurt and Hamburg. About 80 per cent. of the gold is used for gold leaf and 20 per cent, for wire and for colours on china. In 1885 an approximate esti- mate puts the gold for gold beating at about 1,000 kilo- grams and that for wire and gold lace at 100 kilograms, while the consumption of silver was 7,000 kilograms. In this estimate, however, the metal bought from outside concerns is not included. Next to Niirnberg, Dresden produces gold leaf in greatest quantity. In each of the two years, 1882 and 1883, seven establishments at Dresden used about 1,600 ducats per week, which would make 280 kilograms of fine gold per year. The production of gold leaf has not increased in recent times, a circumstance attributable to the increase in the production of imitation gold leaf. The statistics of occupations in the German Empu-e, according to the enumeration of June 5, 1882, have a class entitled " Manufacturers of the precious metals (gold- " smiths, jewellers, gold and silver beaters, gold lace " makers, mints)." In these occupations there were employed in the German Empire : — Of these in the Chief Districts of these Industries.* Independent and other work- ers. Workers at home for wages - Higher officials and others Other assistants and workers Persons. 5,821 730 388 22,960 Persons. 2,078 581 429 17,005 Total - ' 30,099 20,093 * Berlin, district of Cassel (for Hanau), districts of Neckar and Ja^st (for Heilbronn, Stuttgart, Gmiind, and Schorndorf), districts of Carls- ruhe (for Pforzheim) and Mittelfranken (for Niirnberg), Dresden, Bremen. The estimates presented above indicated that, in the principal seats of the industry, where the consumption takes place chiefly in factories and in large quantities, the consumption in recent times amounted to 1 1 ,(500 kilograms, fine gold per year. This does not include the consump- tion for other industrial purposes in these same districts, for instance, at Niirnberg. We may assume that, for those whom the census states to be employed elsewhere, about 5,500 kilograms gold should be added. This would bring the probable total use of gold in the arts in Germany to about 16,500 kilograms. But this estimate seems too high. It is true that the factories of gold and silver articles at Munich, Hamburg, Breslau, Liegnitz, Idar, and elsewhere, use appreciable quantities of gold and silver, and every establishment must consume something, be it ever so little ; yet, taking one thing and another into account, this acces- sory consumption of gold, as it may be called, can be set at 2,000 to 2,500 kilograms gold. This estimate we made in earlier publications. On the other hand, a consumption of more than 1,000 kilograms must be added for various preparations used in gilding (for porcelain, picture- frames, wall paper, &c.) j this being over and above the pure gold leaf already taken into account. Comparatively little silverware has been used in the last 25 years in the retail shops. ITie articles sold in them, such as spoons, forks, chains, thimbles, boxes, are generally obtained from the large factories at Heilbronn, Dresden, and elSewheJe. AH told, we may estimate the consumption of gold and silver in the arts in Germany at about 15,000 kilograms gold fine, and 110,000 kilograms silver fine. Of the silver about 12,000 kilograms is consumed in making oxide of silver, used mainly by photographers. To separate out of this total quantity the proportion which comes, not from coins melted down Or frota fresh bars, but from the remelting of old metal, is a task to be solved with great difficulty and caution. We must con- sider not only the gold and silver articles melted down by the manufacturers, but also those used in the refineries from which they buy their fine gold and fine silver; although, as detailed reports from these establishments show, this latter quantity is not considerable. The consumption of gold and silver in the arts in Germany exceeds considerably the domestic sale of manu- factures of these metals, for there is a large and regular export. For our present purposes this export need not be considered, expect in so iai that we must not count it as part of the consumption of the precious metals in the countries to which it goes. We have paid no attention so far to that important branch of industry which consists in refining gold and silver, since the product of the refining goes to establish- ments, either domestic or foreign, which have already been considered. iNevertheless, it may be of interest to present some facts as to the refineries of Germany. These may serve, moreover, to show that our estimates of the con- sumption in the arts are not too high. The larger refining establishments are the Gold and Silver Refinery at Frankfurt a. M., the North German Refining Company, of Hamburg, and the firm of Sachs and Edinger at Berlin. In addition there are refining works at the mints at Munich and Stuttgart, while several smelting works produce refined gold and silver. The Frankfurt concern produced in the last four years : Fine Gold. Kg. 1882 - - - 4,568 1883 - - - 5,658 1884 - - - 5,176 1885 - - - 5,777 APPENDIX. 173 Fine Silver. 1882 1883 1884 1885 Kg. - 181,260 - 211,590 - 231,916 - 257,410 The use of the precious metals in the arts in Austro- Hungarywas stated at the International Monetary Con- ference of 1881 to average, for the years 1867-1880, 1,456 kilograms gold fine, and 26,346 kilograms silver fine. Precious metals were stamped officially as follows :— App. XVI. Included in these totals is the quantity of gold and silver converted in this establishment into gilding fluids, oxide of silver, &c. ; this quantity was approximately : — Gold. Kg. 18B1 - - - - 120 1882 - - - - 200 1883 - - - - 270 1884 - - - - 320 1886 - - - - 370 Silver. 1881 1882 1883 1884 1885 Kg. - 6,500 - 7,200 - 8,100 - 9,400 - 10,000 The gold refined by this establishment is derived chiefly from old scraps and in very small proportion from fresh bars. A great deal of material comes from Switzerland and Italy, and returns to those countries after refinement. Of the 5,777 kilograms gold refined in 1886, about 3,600 were perhaps used in Germany, and the rest sent to Russia, Italy, and Switzerland. Of the 257,000 kilograms silver, 90,000 may have re- mained at home, 60,000 kilograms were sent to Russia, Italy, and Switzerland, while the remainder was sent partly to France, bnt mainly to India. The other two concerns mentioned above produced annually for the year s 1882-1884 about 2,400 kilograms gold fine, 93,000 'kilo- grams silver fine. The refined gold and silver which these establishments bring into trade is chiefly used at once in the arts, and its extent, therefore, would alone indicate the extraordinary amount consumed in this way, even if we had no other information. A considerable part of the fine gold and fine silver produced by them goes abroad. The statistics of the foreign trade of Germany give the following statements as to the import and export of un- coined gold and silver, and of articles made from those metals : — Import. Thousand Marks. Export. Thousand Marks. Excess of Export. Thousand Marks. 1883. Gold in bars or virgin Silver „ „ Goods, &c, of precious metal 1884. Gold in bars or virgin Silver „ „ Goods, &c. of precious metal 1885. Gold in bars or virgin Silver „ j, Goods, &o. of precious metal 3,828 5,161 7,978 7,380 4,947 8,642 7,951 2,131 8,965 15,077 19,425 11,724 30,889 44,870 12,102 127,216 43,855 11,248 14,264 40,472 4,344 25,942 36,228 4,161 25,085 34,890 Tcni-s. Gold Goods. Silver Goods. 1881 .... 1882 .... 1883 .... 1884 .... 1886 .... Kg. 2,809 3,047 3,167 3,404 3,180 Kg. 31,081 34,701 36,786 35,512 31,793 The actual consumption is considerably larger, as is indicated, indeed, by the large declared export of gold and silver articles. There is also some consumption for gold and silver lace. In the Netherlands domestic products of gold and siher were stamped as follows : — Tears. Gold Goods. Silver Goods. 1871 - . Kg. 1,289,2 Kg. 9,256,8 1882 - . 1,226,1 8,896,9 1883 . . 1,149,0 8,364,. 1884 - . 1,114,7 8,187,2 In Belgium the stamping of gold and silver articles has been optional since July 1, 1869. In 1868 there were stamped gold articles containing 398.04 kilograms, and silver articles containing 3,661.4 kilograms. An estimate of the industrial consumption for the Netherlands and Belgium together of 3,200 kilograms gold and 24,000 kilograms silver would probably be too high rather than too low. According to the statements made by delegates at the International Monetary Conference of 1881, the average annual consumption of the precious metals during the 11 years 1870-80 in Norway and Sweden, was : — In Norway - 22 kg. f . gold ; 1,694 kg. f . silver. In Sweden - 248 „ „ 2,540 „ In Russia there were stamped in 1884 the following quantities of domestic and foreign articles : of gold, 2,079 kilograms ; of silver, 56,935 kilograms. In earlier publications we ventured to make a general statement, with all possible reservations as to error, of the probable consumption of the precious metals in the arts in civilized countries on the average of recent years. We again present such a statement here, having heard of no well-founded objections to it. Surprising as the enormous extent of the estimated annual consumption of gold for ornaments and other purposes in the arts may seem, any doubts as to the probable correctness of the estimate will disappear on consideration of the increasing use of gold for ornament and for industrial purposes, with the growth of population and wealth. A similar increase is unfor- tunately not to be observed in the industrial use of silver : — Gold. Silver. Countries. Gross Use. Subtract for old Material. Net Use. Gross Use. Subtract for old Material. Net Use. United States .... Great Britain .... France ..... Germany ..... Switzerland .... Holland and Belgium Austria.Hungar.v .... Italy Russia Other Countries .... Kg. 21,700 20,000 21,000 15,000 15,000 3,200 2,800 6,000 3,000 2,300 Per Cent 10 15 20 20 30 20 16 25 20 • 19,600 17,000 16,800 12,000 10,600 2,900 2,400 4,600 2,400 2,000 Kg. 186,000 90,000 100,000 110,000 32,000 30,000 40,000 26,000 40,000 60,000 Per Cent. 15 20 25 26 25 20 20 25 20 20 Kg. 115,000 72,000 75,000 82,000 24,000 24,000 32,000 19,000 32,000 40,000 Total 110,000 - 90,000 652,000 -- 616,000 174 KOYAL COMMISSION ON GOLD AND SILVER: Api'. XVI. Mr, Gifien in his essay, entitled " Gold Supply ; the J Rate of Discount and Prices!' ("Essays in Finance/' second series, p. 46), says : — "The demand for gold for use in the arts is put by Dr. Soetbeer at nearly 10,000,000?., but which is not half that amount, as far as I can judge, if we exclude what is taken for the arts out of the coinage of different countries and which will be counted among the coinage requirements. Let the estimate for this purpose be 5,000,000;." This passage indicates a misconception that should be removed. Doubt may exist whether our estimate of the annual net consumption of gold in the arts at 90,000 kilo- grams be too high or too low ; but it is certain that it is immaterial for the problem of prices and of standards of value whether newly-produced and uncoined gold, or gold coin melted down, is used for these purposes. The incre- ment to the monetary supply of gold from the annual gold production is only that sum by which the product exceeds the use in the arts, the export to the East, and any loss from accident. The quantity coined, as such, is not to be considered, since a large proportion of newly-coined gold pieces (such as the Russian half imperials) are at once melted and never get into circulation. If in any year gold is produced to the amount of 400,000,000 marks, and if in the same year 320,000,000 are consumed in the arts, ex- ported to the East, or lost by abrasion, then no more than 80,000,000 marks remain for the increase of the monetary gold supply ; and it is immaterial whether 30, or 60, or 70 per cent, of the gold used in the arts comes from melted coins, old or new. We are inclined to agree that half, or perhaps more, of the gold used in the arts (after deducting the gold articles remelted) is obtained by melting coins ; but this is of no importance so far as the monetary gold supply and the level of prices are concerned. We have added this note because of the great importance of the manner and extent of the use of gold in the arts. 3. The Flow op Gold from Civilized Countries. Even if a higher estimate were put on the industrial consumption of the precious metals,- and on the loss by abrasion and accident, it would still be necessary to consider another factor affecting the proportion of newly produced gold which remains available for the monetary supply of the civilized countries. The great diminution during the invasions of the Ger- manic tribes, and during the centuries following those invasions, in the supply of gold and silver gathered in thy Roman Empire — a diminution which certainly set in to a striking extent — presents in itself difficult problems. But apart from this, it is no easy task to explain the disappear- ance from circulation of a considerable part of the enormous quantities of gold and silver which reached Europe from America in the second half of the 16th century and in the 17th century. We believe that the explanation is to be found mainly in the secreting and burying of coin during the periods of war and insecurity which lasted so long in many countries, especially in Germany, France, the Nether- lands, the countries on the Danube, &c. Money at that time was the most important form of movable wealth, and the endeavour of its owners was, naturally, to save it from plunder by burying it. Our public prints have frequent notices of the discovery of larger or smaller sums of money, specially of Reichsthaler, which had obviously been buried in the times of the religious wars. Many such discoveries of coin must be kept secret, while the points at which such hoards are found form an insignificant part of the total area in which they may be hid. Many millions of marks of money may have been withdrawn for ever from circula- tion in this way. Since the close of the 17th century the buring of money has practically come to an end in Europe. In the countries on the Lower Danube and in Turkey it has lasted, however, to our own times, as is proved, indeed, by the continued coinage of (Austrian) ducats. But if the disappearance of money in civilized countries by its being buried may be fairly considered to be no longer of practical importance, the regular export of the precious metals to the East, on the other hand, has become in modern times of the highest importance. The flow of the metals to the East, it is true, has always been uninter- ruptedly affecting the monetary condition of the West, but in the last three centuries it has become an unusually important factor. The East Indies have been the chief absorber of the precious metals from the civilized countries, and must, there- fore,be specially considered in our discussion of this question. Balance of Trade in British India in the 50 Years, 1835-36 to 1884-85.* Financial Tear. Imported Commodities. Exported Commodities. Excess o£ Export of Commodities. Excess of Import of Precious Metals. Amount of Council Bills sold. Value of the Rupee in Pence. Capital expended by the Govern- ment for Railways, &c. 1835-36—1839-40 1840-41—1844-45 1846-46—1849-60 18B0-S1— 1354r66 1855-B6-1859-60 1860-ei 1861-62 1862-63 1863-64 1864-65 1865-66 1866-67 1867-68 1868-69 1869-70 1870-71 1871-72 1872-78 1873-74 1874-76 1876-76 1876-77 1877-78 1878-79 1879-80 1880-81 1881-82 1882-83 - 1883-84 1884r85 1,000 Rupees. 62,846 86,760 90,463 116,*71 178,819 234,937 223,204 226,324 271,466 281,609 296,992 290,387 357,068 359,991 829,276 344,691 320,918 318,746 338,360 362,221 388,873 374,406 414,642 378,008 411,660 531,168 491,134 520,957 652,793 667,031 1,000 Rupees. 116,454 149,353 168,195 193,461 267,312 329,706 363,170 478,696 666,264 680,270 654,911 418,600 608,741 530,622 524,711 563,318 631,858 662,508 649,960 663,692 680,^16 610,189 652,223 609,376 672,124 746,806 819,685 834,851 881,701 832,653 1,000 Rupees. 63,607 62,693 67,742 77,990 88,493 94,769 139,966 262,273 384,799 398,761 368,919 128,213 151,683 170,720 196,439 208,627 310,940 233,761 211,600 201,371 235,733 237,681 231,369 260,464 , 214,638 328,551 313,894 228,967 275,522 1,000 Rupees. 21,769 27,977 15,727 32,618 132,907 95,606 142,709 193,983 216,960 199,188 243,931 108.064 102,034 137,601 129,124 32,241 100,977 32,685 38,786 65,157 _ 8W»«- - - 74,062 161,445 30,745 96,202 75,478 102,230 124,111 118,687 119,176 £ 1,915,957 2,055,971 2,605,773 8,370,728 992,523 797 1,193.728 6,641,.576 8,979,521 6,789,473 6,966,116 5,067,589 4,137,286 3,705.711 6.980,122 8,413,509 10,310,339 13,939.096 13.286.678 10,841,614 -12,389,018 12,696,799 10,131,455 13.948.665 15.261.810 15,239.677 18,412,429 16,120,621 17,699,805 13,768,909 23,100 22,850 22«» 23,900 23.567 23,920 23,907 23,876 23.835 ■ 23,064 23,190 23,197 23,267 22,195 23,126 22,751 22.3,1 23.156 21.625 20.508 20,791 19,791 19,961 19,956 19,895 19,525 19.536 19.308 1,000 Rupees. 6,025 13,706 26,996 11,678 16,365 21.846 35.533 42.496 42,706 38,003 47.911 43,819 130.952 92,972 39,520 46,651 40,201 67,324 Estimate ' The financial year ;s from 1 April to 31 March, previous to 1867 from 1 the averages are in every case given. The statistics are taljen from the Mr. Palgrave in the Third Report of the Royal Commission on Depression May to 30 April._ For the Ave official communicatious of the of Trade, 1886. e-year periods, from 1835-36 to 1855-56, Indian OfHoe for the Memorandum of APPENDIX. 175 Import and Expokt of the Precious Metals, &c . in British India in the 60 Years 1835-36 to 1884-85. Financial Years. Silver Imported. Silver Exported. Excess of Im- port ol Silver. Excess of Im- port of Gold. Silver Coinage, Total. Silver Coinage, exclusive of Ee-coinage. Registered Debt m India and England. 1,000 Eiipees. 1,000 Rupees. 1,000 Rupees. 1,000 Eupees. 1,000 Rupees. 1,000 Eupees. £ 1833-36-1839-10 20,966 2,639 18,427 3,332 17,902 33,236 30,347,177 18W-41— 18«r46 31,693 6.877 21,716 3,261 46,881 37,610 35,255,247 18«-40— 1M9-50 18,698 12,763 5,935 9,793 33,800 27,072 43,663,890 1850-51—1834-55 31.53-2 9,706 31,846 10,773 11,818 37,972 18,719,860 1855-56—1859-60 108,929 8,204 100,733 32,183 97,186 91,998 65,732,218 1860-61 64.316 11,066 53,280 42,326 62,971 51,017 91,667,606 1861-63 97,615 6,761 90,865 61,841 74,700 70,704 98,577,970 186-2-63 136,271 10,772 126,502 68,482 93,564 92,615 96,827,787 1863-6-1 110.37-2 12,10-1 127.967 88,983 113,567 114,797 90,947.635 186*-65 111,883 14,095 100,788 98,400 109,113 101,869 90,727,082 1865-66 201,841 15,167 186,687 57,245 146,394 145,071 90,508,133 1866-67 86,651 16,924 69,631 38,423 61,831 61,189 93,578,890 1867-68 69,994 14,055 65,940 16.095 43,861 1.3,133 96,481,276 1868-69 99,790 13,780 86,010 51.591 42,693 42,070 96,191,642 1869-70 82,614 9,141 73,203 66,920 75,105 74,736 101,747,898 1870-71 26,622 17,203 9,119 22,821 17,140 17,182 104,326,385 1871-72 80,000 14,677 66,32.1 35,653 17.093 16,904 106,969,4fi6 187-2-73 19,133 12.191 7,151 26,434 40,086 39,809 105,470,985 1873-74 41,437 16,179 24,958 13,826 24,000 23,700 107,534,907 1871-75 60,518 11,096 4«,423 18,735 49,410 48,969 118,446,992 1875-76 31,613 19,090 16,554 15,451 25,826 25,602 122,570,014 1876-77 99,924 27,935 71,989 2,073, 62,929 62,711 127,320,159 1877-78 157,765 11,002 146,763 4,681 162,698 161,803 134,631,553 1878-79 55,937 16,230 39,707 ■T- S,g6s 72,784 72,108 138,868,043 1879-80 96,050 17,353 78,697 17,505 103,419 102,670 151,728,065 1880-81 53,162 14,236 38,926 36,562 44,107 42,497 167,388,878 1881-82 61,664 10,873 63.790 18,440 29,219 21,863 156,796,109 18S2-33 83,580 8,778 74,802 49,309 73,887 66,085 169,274,460 1883-81 71,085 10,024 64,062 54,625 41,120 36,634 161,300,221 1881-85 91,100 18,644 72,466 46,719 60,264 67,712 ie2,461,71SEstim, App. xvr. In the year 1878-79 the gold export from India exceeded the gold import, and gave an excess export of gold of 896,173/. In the Indian Circular of J. West-wood Thompson, of January 1886, the export of the precious metals to the East during the 32 calendar years, from 1853 to 1885, is given as follows : — Export from England by steamers of the Peninsular and Oriental Steam Navigation Company - . - Export from Mediterranean Ports by steamers of the above Company, and of the Mes- sageries Maritimes Total - Gold. £ Silver. £ 43,312,914 209,615,368 48,167,090 68,932,856 j€91, 480,004 278,448,224 In the calendar year 1885, the Council bills and tele- graphic transfers amounted to 14,27,69,113 rupees, for which 11,103,931/. was paid. The total sum of Council bills, &c., from 1861-62 to 1884-85, amounted to Es. 2,85,74,40,03-3, and their value to 252,421,911/. The amounts expended from State funds for productive public works, especially for railways in the 11 years, 1874 to 1884 were : — 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 £ 6,625,134 6,081,561 6,258,597 6,574,615 7,123,677 7,123,199 7,773,425 9,499,533 9,806,226 10,342,086 10,522,022 Notes to the Tables on the Balance of Trade, and the Movement of the Precious Metals in British India, 1836-85.* The preceding tables take account of factors of essential importance for the silver question, and the present and future of the question of standards. Many of those in whose hands the present publication will come will under- stand without further aid the importance and connexion of these long columns, but for most readers a detailed con- sideration may not be superfluous. What follows rests in the main on our earlier publications. British India, inclusive of the native States, had, by the census of 1881, an area of 1,378,044 square miles. It had a population of 263,982,596, of -whom 198,790,853 "were directly under British rule on 868,314 square miles, of territory. (Ceylon and the Straits Settlements are not included.) When we consider the economic condition and history of India, this enormous population must always be kept in mind. India is, on the -whole, a fertile country, and produces much more than is consumed^ within its limits ; but the domestic production of the precious metals is insignificant. As far back as our knowledge goes, the export of commodities from India has considerably exceeded the import into the country, and the consequence has been an almost continuous inflow of the precious metals. India has, therefore, in a higher degree than almost any other country, a so-called favourable balance of trade. Pliny, who died 79 A.D., complains that India absorbed from the Roman Empire no less than 5,000,000 sesterces per year, that is, no less than 10,800,000 marks. In a book of travels published in 1699 by a Frenchman, Bernier, -who lived some time at the Court of Delhi, and made a report on'the commercial relations of India to Colbert, the great French statesman, it is said, " The gold and silver of the " world, after circulating for some time, finally flow to " India, as into an abyss from which there is no return." Alexander von Humboldt calculated the flow of silver to India and the rest of Eastern Asia at about 25,000,000 piasters annually at the close of the 18th century. Hum- boldt's estimate seems too high when compared to the recorded shipments by the English and Dutch East India Companies. But this is hardly the case with the calcula- tion of Mr. van den Berg, who concludes that for the » In the following notes the fiscal years of India are indicated by that year in -which the fiscal year ends, that is to say, i°f 'f f °f„,lSn the simple figure 1886 is used. Where calendar years are m question this is expressly stated. E. signifies rupees. 176 UOYAl, COMMISSION ON GOLD AND SILVER! Ai'P. XVI. whole of the 18th century the average annual export of silver from Europe to Eastern Asia was about 23,000,000 marks. We believe, however, that this last estimate is too low. It should be noted that during the 17th and 18th centuries considerable sums of gold, whose value was then considerably lower as compared to silver, were exported from Eastern Asia to Europe. During the first half of the present century the flow of precious metals to India has gone through several phases. During the years from 1801 to 1813 the precious metals imported into Calcutta, Bombay, and Madras amounted to about 40,000,000 marks per year ; and during the period immediately following the abolition of the East India Com- pany's monopoly it rose to about 90,000,000 marks per year. Thereafter a great decrease set in for a series of years, and about 1832 the net import of the precious metals into India became for a while practically nothing. Then for the years from 1834 to 1850 it maintained itself with no great variations at about 50,000,000 marks yearly, at a time when the total production of silver was from 110,000,000 to 140,000,000 marks. Since 1851 the balance of trade in India and the export and import of commodities have been for longer periods, as follows : — Imports into British India. Tears. Commodities. Excess of Export. Import. Export. 1851-60 - 1861-70 - 1871-80 - 1881-85 - Million R. 230,4 514,6 597,6 822,9 Million R. 147,2 287,0 365,3 630,6 Million R. 83,2 227,6 232,3 292,3 It thus appears from the official statistics that the excess of exports of merchandise from British India amounted, in the 35 years from 1851 to 1885, to the colossal sum of 6,893,000,000 rupees. The export and import of commodities, and the excess of exports show a considerable growth in these 35 years, as appears in the following statement by per cents. : — Commodities. Excess of Export. Import. Export. 1861-60 - 100,0 100,0 100,„ 1861-70 - 223,3 19B,o 273,3 1871-80 - 259,4 248,2 279,2 1881-85 - 357,2 360,5 351,3 By value, the average exports of merchandise during the years 1881-85 exceeded the average exports during the years 1851-60 by no less a sum than 209,100,000 rupees. These statements refer only tu the trade by sea. The statistics in regard to the overland trade of British India are exceedingly incomplete. The following table in regard to some of the more important articles of India's foreign trade indicates which were the chief factors in this extraordinary increase of trade : — Exports from British India. Value in Million Rupees. Articles. 1869-74, 1885. Average. Cotton in bales - . 174,1 133,0 „ yarn - 1.1 25,1 goods - - 12,3 20,4 Indigo - - 34,1 40,7 Rice " 46,2 71,9 "Wheat - - 2,7 63,1 Hides and skins - 2.3,6 49,4 Jute, raw - 32,5 46,6 „ manufactured - - 2.2 16,4 Oilseeds - 24,9 107,5 Sugar - - 3,6 7,9 Tea - - - 14,1 41,4 Total 371, 622,4 Articles. Coals Cotton yarn „ goods Machinery Manufactured metal Oil Silk goods Railway material Sugar "Woollen goods - Vsdae in Million Rupees. 1869-74, Average. 5,5 27,5 147,7 5,9 24,4 0,5 4,8 9,1 12.9 33,6 207,1 15,7 49,B 12,3 11,2 28,3 21, 10,9 We turn now from the statistics of commodities to those of the export and import of the precious metals. In the general tables printed above we have confined ourselves, so far as gold is concerned, to the net import, that is to say, the import after deducting the export, since the export of gold from India, barring exceptional circumstances, such as occurred in 1 879, is unimportant. The export of gold on the average of the 50 years from 1836 to 1885 was not quite seven per cent, of the import of gold during the same time ; that is, there were only 91,900,000 rupees exported, against 1,370,800,000 rupees imported. So far as silver is con- cerned, the re-export is more important. In the last 50 years 553,700,000 rupees were exported, as against 3,191,800,000 rupees imported. But this re-export of a considerable portion of the imported silver takes place in the main to other countries of Eastern Asia, and very little of it finds its way back into international trade. In the 35 years from 1851 to 1885 the import and export of the precious metals in British India showed the following annual averages in the periods mentioned : — Gold. Years. Import. Export. Excess of Import. 1861-1860 1,000 Rupees. 22,036 1,000 Rupees. 659 1,000 Rupees. 21,477 1861-1870 61,712 1,781 59,931 1871-1880 21,089 6,367 14,722 1881-1885 47,742 613 47,129 Silver. Years. Import. Export. Excess of Import. 1851-1860 1861-1870 1871-1880 1881-1885 1,000 Rupees. 70,240 109,432 67,224 73,318 1,000 Rupees. 8,955 12,445 16,626 12,513 1,000 Rupees. 61,285 96,987 50,598 60,805 There is no tax on the export and import of the precious metals in British India, and the trade concentrates itself in the main in a few ports ; the correctness of these important statements, therefore, may be assumed. To assure sound conclusions it is necessary to take account of the places from which India imports her precious metals, since a considerable part of the import comes from China and IS derived from the production in that country, which we have not considered in our statistics of the production of the precious metals. APPENDIX. I'zr Import of Gold in British India from Trars. England. Australia. China. Other Countries. ISSO • 18S1 - 1882 - 1883 • 1884 - ISSo - 1,000 Rupees. 3,021 10.478 10,982 13,932 13,285 14,973 1,000 Rupees. 80 2,912 13,219 14,267 19,206 12,787 1,000 Rupees. 11,842 15,487 13,770 11,679 13,605 9,238 1,000 Rupees. 5,561 7,844 10,693 11,083 8,599 10,764 Import of Silver In British India from Tears. England. China. Other Countries. Total. 1880 - 18S1 - 1882 ■ 1883 - 1834 - 1885 - 1,000 Rupees. 47,140 28.646 37,680 43,903 64,679 66,834 1,000 Rupees. 28,237 1,606 16,123 12,658 5.629 11,265 1,000 Rupees. 20,673 22,910 11,859 27,017 13,977 13,001 1,000 Rupees 96,050 53,102 64,664 83,680 74,083 91,100 The re-export of silver from British India takes place mainly to Mauritius, Ceylon, the Straits Settlements, and the Persian Gulf. What use has been made of the enormous sums of gold and silver that remain in India ? Of the import of gold, a very small part has been coined into domestic gold coin. The total coinage for the 60 years since 1835 amounts to no more than 2,362,399 rupees ; the rest of the gold, about 1,276,000,000 rupees, has been used for ornament, or has been hoarded, in the form of British and Australian sovereigns, by the richer natives, and in the treasuries of Indian princes. The gold that once has flowed to India is lost, almost without exception, to trade. The natives are careful watchers of the bullion market, and have not failed to note that in recent times the value of silver at the bazaars has become less as compared to gold. Ornaments and hoards of silver are therefore less highly prized than in former years. In India, as elsewhere, gold is taking the place of silver. Of the silver imported to India the great mass has been coined into rupees. A considerable part of this is still in circulation, in the Government treasuries, or in the banks ; the rest has been converted, either directly or .by smelting down rupees, into articles of ornament. As the totals show, the net import of silver into British India for the period from 1836 to 1886 has reached the enormous sum of 2,638,100,000 rupees. The coinage of of silver has reached the sum of 2,992,800,000 rupees, of which 242,300,000 rupees were got by re-smelting older Indian coins. It has been supposed that the amount of silver now in circulation in India, inclusive of the sum of nearly 222,000,000 rupees in Government treasures and in banks, may be stated at 2,000,000,000 rupees. We believe that this estimate is much too high. The many continued assurances sent to us in regard to the extraordinary extent to which silver is used for ornament and is hoarded, lead us to consider it highly improbable that no more than 24 per cent, of the imported silver has disappeared in this way. The childlike habit of hoarding and of burying coin, which resulted very naturally from insecurity of for- mer times, maintains itself to our omi day in many parts of the Indian continent, and has maintained itself obstinately in face of all the influences of civilisation. It is true that the beneficent effect' of British rule and the general progress of civilisation have caused it to diminish in some districts ; but, again, the circulation of silver coins has been pushed into channels formerly not reached by it and where there was previously no opportunity for hoarding. Wages have risen, the use of money has extended, and since the needs of the population have not increased in proportion, more money is available for hoarding. In many parts of the densely populated land no means exist for securely in- vesting money, confidence is weak, and the hoarding of coin is the only safe form of saving. Moreover, an Oriental o 54648. population is not easily moved from its old habits. Con- sidering the habit of hoarding, and the fact that the circulation of rupees is in many districts very small, some observers have assumed that the probable present monetary circulation of India is no more than half the sums that have been coined. This is no more than a guess, yet the contrary statement of a circulation of about 2,000,000 rupees is also a guess. The same difference of opinion appears when it is stated, on the one hand, that India is in a condition to absorb in time any quantity of silver not elsewhere disposable, and on the other hand, in tlie assertion that the demand for silver in India, other things remaining the same, can be satisfied in future by about 30,000,000 rupees per year. The great importance of the flow of the precious metals to India induces us to add extracts from two recent essays whose author has practical acquaintance with the condition of India. In an essay in the " London Bankers' Magazine," May 1866, it is said : — " The continued fall in the rate of exchange on India has been accompanied by great changes in the trade between India and Great Britain. The export of com- modities from India has risen greatly, but the export from Great Britain to India has risen no less, while at the same time a considerable fall in prices has taken place for Indian articles of export and import. The export and import trade of a country are always closely connected. In the case of India there is a com- plication, because the Indian Government has annually to send large sums to England. These sums are due for interest on the Indian debt and on the railroad loans guaranteed by Government. Besides, there are consider- able payments for purchases in England on Indian account. Lastly, Europeans employed in India annually remit large amounts to their families in Europe, and remittances are made for pensions, &c. All these payments are so many debts due by India. They must be paid by an export of commodities from India, and a natural con- sequence is that exports considerably exceed the imports. " If we compare the average of the last five-year period, 1881-1886, with the average of the period 1866-1870, the excess of imports shows an increase of 91,320,000 rupees, while at the same time the import of gold shows about the same increase, and the net import of silver shows a decrease by about 33,600,000 rupees. Considering the increase in the production of silver and the fall in the price of silver, we might have expected an increase rather than a diminu- tion in the import of silver. The balance of payments has therefore been maintained in some other way, and this has taken place by the increase in India council bills. " The bills of exchange sold by the Indian Government in London were, on the annual average, as follows : — App. XVI. 1866-1870 - 1871-1876 - 1876-1880 - 1881-1885 - - 6,371,371 - 11,364,047 - 12,886,048 - 16,026.268 " This method of payment, the result of the increasing debt of India to England, has risen in the last 20 years by more than 10,000,0002. per year. In the same period the import of the precious metals to India has decUned by nearly 3,500,00UZ. "The rate of council bills during the years 1866-1870 averaged 23.31 pence per rupee, and the price of silver in London averaged 60.78 pence per ounce. In 1886 the averages were only 19.3 pence and 49.94 pence. " The increasing supply of council bills has depressed the price of silver, and the fall in the price of silver has again depressed the rate of exchange. "We have already mentioned the extraordinary increase of the council bills which replace the export of silver to India, and have mentioned the increasing debt of India to England as its cause. It is true that this cause has been, upon the whole, a most important one; but there is still another reason why it should have increased in effect in the last decade. The explanation is that in former periods the quantity of council bills remained smaller because the Indian Government was raising in England loans for Indian railways, and from the yield of these loans deducted certain sums which otherwise would have had to be paid by council bills. As loans ceased to be contracted, it became necessary to resort to a larger issue of council bills." We quote now, with some condensation, extracts from the concluding passages of an excellent book recently published in Calcutta by Mr. Barbour, secretary of the Treasury for India (" The Theory of BimetaUism and the Effects of the Partial Demonetization of Silver on England and India "). Z 178 ROYAli COMMISSION ON GOLD AND SILVER : App, XVI. " The common opinion thnt India can absorb any quantity of silver, and that the absorption is only a ques- tion of the jwice of Indian products, is not founded. In the years from 1836 to 1855 the import of silver to India was moderate, about sufficing to meet the demand. From 1856 to 1866 India imported much uiore silver, partly in consequence of the heavy loans resulting from the Sepoy insurrection and from the building of railroads, partly because of the extraordinary demand for cotton during the American civil war. From 1867 to 1876 India im- ported comparatively little silver. From 1877 to 1885 the import rose again, chiefly in consequence of the favourable balance of trade. India needs in any event an annual import of silver of about 30,000,000 rupees; possibly twice that sum. It is not likely that this amount will be exceeded in the future, unless there be great Government loans or unusual contingencies. No doubt cheap freights to Europe and the extension of railroads and canals will stimulate exports, and especially the export of wheat ; yet there is a limit to the possibility of exports from India. Moreover, the quantity of council bills is likely to increase on account of interest on the Indian debt, and a general rise of the payments due by the Indian Government in London, and the remittances of silver would be diminished by this cause. " Since the depreciation of silver no rise has taken place at Indian ports in the prices either of articles of export or import. Yet an effect of the arbitrary depression of silver on Indian prices may exist in the prevention of a fall in prices that otherwise would have taken place." Although British India is by far the most important absorber of the precious metals, the other countries of JEastem Asia must also be considered. In former years, when the export of opium from India to China had not reached so great an extent, silver was exported to China in large quantities, and there went into circulation or was hoarded. A considerable flow of the precious metals still takes place from the civilised countries to China partly by sea and partly by way of Kiachta ; for the value of the tea, silk, and other products exported far exceeds that of the European and American productions which are imported. A large part of the coin brought into China is re-exported to India in exchange for opium, cotton, &c. The rest remains in circulation or is hoarded within the country. The case is the same with the gold which Chinese workmen bring from California and Australia. The statement in the " Deutsches Handelsarchiv " for July 1886 gives the following figures of the recorded import and export of the precious metals in China : — Exports and Imports of Precious Metals in China. Import. Years. Sycee Shanghai Taels. Mexican Dollars. Gold Shanghai Taels. 1881 1882 1883 1884 1885 14,109,4,88 23,908,914 14,203,193 16,860,067 14,080,668 13,406,037 18,471,967 10,674,167 12,410,787 8,111,205 1,360,392 1,325,086 1,426,173 302,476 2,617.426 1881-1S86 Average 82,162,360 16,430,472 63,074,163 12,614,833 7,021,653 1,404,311 Export. Tears. Sycee Shanghai Taels. Mexican Dollars. Gold Shanghai Taels. 1881 13,836,636 6,516,570 820,464 1382 17,884,084 12,427,371 881,7ir. 1883 10,733,356 8,276,033 1,224,629 1884 14,348,048 4,236,585 869,708 1885 22,679,887 2,888,527 4,765,061 1881-1885 79,481,010 33,345,086 8,661,667 Average 16,896,202 6,669,017 1,710,313 Converting the Sycee silver and the Mexican dollars into kilograms fine, we get for the five years, 1881-1885, an average import of silver into China, 868,800 kilograms ; export of silver from China 706,200 kilograms, or an annual excess of imports of 162,600 kilograms. On the other hand, the exports of gold exceed the imports. In the report accompanying these figures it is said: — " The general feeling of insecurity among the well-to-do classes prevents them from investing their property in any income-yielding form. Although enormous sums are undoubtedly saved, it is impossible to give any figures as to their amount. In so-called good times a part of these hoards are turned into the banks for investment, but the least feeling of coming insecurity causes them immediately to disappear." . The exports of the precious metals ttom the United States to China (inclusive of Hong Kong) and to Japan, and the exports from these countries are given as follows in the official statistics : — Financial Year. Export to China. Import from China. Export to Japan. Import from Japan. 1871 Dollars. 3,571,647 Dollars. 1,960 Dollars. 1,164,168 Dollars. 89,938 1872 6,999,335 700 3,580,053 2,636,659 1873 7,164,549 181 6,890,871 1,349,580 1874 9,381,041 39,772 822,182 20,910 1876 6,603,369 6,840 — 12,733 1876 7,929,689 6,908 2,070 38,123 1877 15,430,866 10,952 1,672,538 2,372 1878 16,212,675 7,569 637,067 95,078 1879 7,431,362 134,635 - 49,322 1880 6,612,823 90,991 270,500 441,941 1881 3,478,602 41,179 2,468,635 904,008 1883 4,460,210 36,005 454,078 712,970 1883 7,140,480 192,801 636,916 1,061,560 1884 9,341,659 5,260 1,046,200 656,057 1885 14,573,233 1,629 1,487,846 541,368 The exports of precious metals from the United States to China and Japan consist almost exclusively of silver, whereas the imports consist mainly of gold. There is, however, an import of trade dollars, of which a consider- able quantity have found their way back to the United States, where they are sold at a higher rate than their intrinsic value. The trade takes place almost exclusively by way of San Francisco. In earlier publications we estimated the annual average export of silver from San Francisco to Asia for the period 1861-70 at 88,000 kilo- grams, and for the period 1871-80 at 215,000 kilograms. Westwood Thompson's Indian Circular states the ex- port of the precious metals from San Francisco to China, as follows : — Years. Mexican Trade Dollars. 1884 1885 Dollars. 8,931,207 7,662,162 Silver in Bars. Gold. Dollars. 3,986,797 4,727,132 Dollars. 385,114 477,320 The export of the precious metals from Russia to China by way of Kiachta is given as follows in the tables separately published on this subject : — Years. Silver. Gold. 1872 . . . - Roubles. 432,000 Roubles. 942,000 1873 . . . - 70,000 1,063,000 1874 . . - . 44,000 1,003,000 1875 .... 29,595 1,621,200 1876 .... 160,294 824,831 1877 .... 681,950 82,010 1878 .... 2,628,579 526,572 1879 .... 2,323,847 366,701 1880 .... 1,670,874 1,344,826 1881 .... - — 1882 .... 3,088,822 387,113 1883 - - . - 1,862,271 152,403 APPENDIX. 179 The exported gold consists of kali; imperials; in the exported siher the proportion of Russian silver coins has become small, and silver bars are chiefly used. The great differences in different years are surprising. The average annual flow of the precious metals in this channel in the period 187^-83 amounted to about 900 kilograms gold and 21,000 kilograms silver. The Netherlands exported to their colonies between 1S42 and 1880 silver coins as follows : — 1842-1860: fl. 98,602,127.50= 931,790 kg. f. silver 1861-1870: „ 160,634,-J5G.00=l,423,49(i „ „ „ 1871-1880:. „ 83,206,075.00= 7^6,297 „ „ „ 1842-1880 : fl. 332,442.658.50=3,141,583 kg. f. silver Assuming the sums that came back to be 3i per cent, of the total, we get for the 38 years a net export of silver to the Dutch East Indies of 3,031 ,600 kilograms of silver fine, making an annual average of about 80,000 kilograms. This estimate, derived from the Mint at Utrecht, does not tally with the statements which Mr. X&n den Berg, Presi- dent of the Java Bank, at Batavia, presents on the flow of coin between the Netherlands and their East Indian colonies. This gentleman gives the following estimates : — Tears. Export from the Netherlands to the East Indies. Export from the East Indies to the Netherlands. 1875 1876 1877 1878 1879 ISSO 1881 Gulden. 4,250,000 3,500,000 17,500,000 10,000,000 6,000,000 " 3,000,000 Gulden. 2,480,000 8,339,000 6,720,000 3,050,000 3,930,000 1,217,00 1875-188 1 44,250,000 25,766,000 The re-export of Dutch silver from Java, which of course does not extend to subsidiary coins is to be explained in two ways. The establishment of the gold standard in Holland has given to silver since 1875 a nominal value exceeding its intrinsic value. The absorption of the silver imported into Dutch East India by hoarding and melting on the part of the natives has ceased. Before 1875 this absorption of silver took place to a remarkable extent; and so far as this earlier period is concerned the Mint statement given above may be considered correct. The gold and silver which is coined in Austrian Mints into ducats and Maria Theresa thalers is also to be con- sidered as lost from the monetary supply of civilized countries. The same is true of the considerable sums of coin which the French Government sends year after year to Algeria; they are spent among the natives, and in part never return to trade. The coins sent by France in recent years to Farther India must also have absorbed a great deal of silver, in regard to which, however, we have no precise information. The wars carried on by the English during the last few years in South Africa, Egy]5t, and the Soudan have caused large quantities of sovereigns to go to those countries. Such coins are likely to find their way back to civilised coimtries only in part and gradually. If we now reckon together the total quantity of the pre- cious metals which has flown from civilised countries in the five years 1881-85 to Asia and Africa, we may conclude that it has amounted annually to more than 30,000 kilo- grams gold and 1,500,000 kilograms silver. The great imcertainty of any estimate of this kind must, of course, be admitted. . We endeavoured to give in the first part of the Materials a statement of the total production of the precious metals in the years from 1851 to 1885. In the preceding para- graphs we have endeavoured to give an estimate of their contemporaneous consumption. We now venture to present a general table, similar to others previously prepared by us, showing the probable monetary supply of gold in civilized countries. We do not, however, venture to present a similar table in regard to silver. If the statements of the production and the consumption of gold and silver are not exact, the same is the case in a still higher degree with the present state- ment. Yet we give it, since it affords a certain check on the approximate correctness of individual estimates, and since, upon the whole, there is a probability of its being accurate. If one or another of our estimates has been very far from the truth, this must appear in such a combination of the results. We present to the reader, who will bear in mind these introductory remarks, and will remember, moreover, what we have said as to the latent reserve of the precious metals, a summary balance sheet of the produc- tion and consumption of gold and of the monetary gold supply on hand at different periods since 1851. App. XVI. Survey of the Changes of the Monetary Gold Supply of the Civilized Lands in the Years 1851-1885. Yield of Gold. AppUoation of Gold (not Monetary). Monetary Application and Reserve of Gold. Periods. Wear of Coins and Chance Loss. Industrial Use, exclusive of Old Materials. Flow to the East, .exclusive of the Import thence. Total Application (not Monetary). Monetary Supply and Reserve of Gold to the end of the Perioda. 1850 - 1861-1860 1861-1870 1871-1880 1881-1885 Kg. 2,006,000 1,900,000 1,732,000 746,000 Kg. 6,000 7,000 8,000 4,000 Kg. 280,000 570,000 840,000 420,000 Kg. 100,000 300,000 110,000 160,000 Kg. 386,000 877,000 958,000 574,000 Kg. 1,621,000 1,023,000 774,000 172,000 Kg. 1,200,000 2,821,000 3,844,000 4,618,000 4,790,000 Million M. 3,348 7,871 10,725 12,884 13,364 Note.— I gave above a communication published by the former Master of the American Mint on the industrial use of the precious metals in the United States for the year 1883. After this was printed, I received from the present Master of the Mint, Mr. Kimball, a letter, dated September 6, enclosing a corresponding statement for the year 1885, which was drawn up for the next annual report. Mr. Kimball remarks in it : — . -Circulars were sent to about 8,000 individuals and firms whose business led him to suppose that they were consumers of gold and silver in the industrial arts. Responses were received from 4,,372 firms, of which 2,700 proved to be consumers. The value of the gold used by the 2,700 firms during the calendar year 1885 was reported as follows ; namely, 10,837,944 dollars against 14,600,000 dollars reported by about the same number of iirms to the Director of the Mint in 1884. Of this amount about 2,800,000 dollars consisted ot United States coin and about 6,000,000 dollars of stamped United States bars. The foreign coin used amounted to 178,000 dollars, and old jewelry to 819,000 dollars, leaving only 467,000 doUais ot na,tivegrainsand569,000dollarsof wire and rolled plate. , , . ,„ •»»„„-,,,, The silver consumption reported by the same firms was 3,470,000 dollars, of which 124,910 dollars consisted of United States coin, 2,773,9/6 dollars of United States refinery bars, 40,000 dollars of foreign coin, and 219,000 dollars of old jewelry, plate, &c., leaving only 94,000 dollars of native grains, ^id about 217,000 dollars of wire and rolled plate. , ^„ „ . ,„„„ The result of this inquiry leads to the conclusion either that the consumption of gold a,nd silver in the industrial arts has fallen ott since 1883, •"■..tjiat there is less duplication in the returns than heretofore as between original and secondary manufacturers. Having the benefit of the previous lists of jewellers and others, and a recent edition of Zell's Business Directory, names were selected of oersous only who had either replied heretofore, or who the Director had reason to believe were engaged in the manufacture at first hand of gold and silver materials." Z 2 180 KOVAL COMMISSION ON GOLD AND SILVER; App. XVI, Statement showing the Value and Character of the Gold and Silver used in the Arts and Manufactures . during the Calendar Year 1885, as reported by the Persons and Firms who have been addressed. Gold. Silver. Manufactures. United States Coin. Stamped United States or Refinery Bars. Old Jewelry, Native Grains, Foreign Coin, and other Material. Total Gold. United States Coin. Stamped United States or Eeiinery Bars. Old Jewelry, Native Grains, Foreign Coin, and other Material. Total Silver. Chemicals- - - - Platers .... Gold Pen Manufactures Gold and Silver Leaf - Mental and Surgical Instru- ments, &c. Spectacles and Opticals- Miscellaneous ... Jeweh-y and Watches - Dollars. 82,040 251,741 7,433 68,150 3,970 62,557 116,604 2,266,677 Dollars. 13,903 210,831 34,883 627,453 149,186 62,420 44,168 4,980,458 Dollars. 10,433 216,143 14,136 91,761 21,630 19,316 30,172 1,622,841 Dollars. 66,376 677,716 56,455 677,354 174,786 134,293 190,944 8,869,876 Dollars. 91 27,824 56 4,683 2,487 838 90,933 Dollars. 305,165 1,160,463 3.191 21,881 107,717 42,424 5.330 1,121.804 Dollars. 75.832 • 198,345 812 24.,2-10 16,402 4,037 1,355 254,505 Dollars. 381,088 1,392,632 4.058 46,121 137.801 48,9X8 7,523 1.407.242 Total 2,789,072 6,023,306 2,025,422 10,837,799 126,910 2,773,976 574,528 3.475,413 IV.— IMPORTS AND EXPORTS OF THE PRECIOUS METALS. The statistics of most countries give much attention to T^iie imports and e.xports of the precious metals, coined and uncoined, and generally give detailed statements of their inflow and outflow. This may be ascribed in part to a persistence of the ideas of the mercantile system, by which the net import of the precious metals was supposed to indicate an obvious increase of national wealth. But the statistics are kept, also, because the movement of the precious metals, when combined with other data, is sup- posed to give important information for many practical questions. The various periodicals which give regular information on ti-ade and finance publish as quickly as possible, at the close of each month, the official statements of the imports and exports of gold and silver in Great Britain, France, the United States, &c., giving them in more or less detail and accompanying them with more or less comment. It is supposed that these statements give significant data, both for the time being and for longer periods, in regard to the general state of trade. Doubts, it is true, have been expressed occasionally by competent persons as to the value of such conclusions ; and a thorough reform in the statistics of the international movement of the precious metals has been declared necessary. We will cite a few recent utterances. Mr. J. B. Martin, a London banker, said on the 16th of April of this year, at a meeting of the well-known Institute of Bankers, that he had had the curiosity to count the SO-franc pieces which his firm had received during a recent influx of French gold into Eng- land. He found that the amount was about 3,300,000 francs ; whereas the declared value as given by the Board of Trade was, only 600,000 francs. The Board of Trade had stated only one fifth of the actual import. If many cases of this kind occur, the oflicial statistics of the im- ports and exports of tlie precious metals must be con- sidered quite untrustworthy. Professor Carlo F. Ferraris in a report to the Council for Statistics at Rome, has shown that the customs statistics of the movement of the precious metals to and from Italy are very incomplete. For instance, the ofiacial statement gave 31,010,225 lire as the export of gold and silver in the year 1884, whereas a careful investigation made elsewhere showed the export to The interest generally felt in the regulai- official state- ments of the mternational movement of the precious metals induced us to undertake for this publication an examination of the trustworthiness of these statements, the more so since a sufficient means of cheeking them was at hand If m two countries, E. and F., the export and import of the precious metals from the one to the other IS given correctly, then, obviously, the export from E to F. must equal the import from F. to E. If the statistics ot both countries agree, we may conclude that their state- ments are correct, since it is practically impossible that for longer periods arbitrary or incomplete statements should happen to agree. On the other hand, if considerable discrepancies appear, we must conclude that the statistics of one of the countries are incomplete and untrustworthy; or, indeed, that this is the case with both. It need not be sa,id that we are not concerned here with occasional or slight discrepancies. Let us consider first the trade between Great Britain and France. In the official statistics, both of England and of France, calendar years are used, and with the present means of communication betiveen the two countries, the difference in time between export and import can cause no ^eat discrepancy. We must conclude, therefore, that if the statistical returns are correct on both sides, they should agree substantially. The following tables, which reproduce the official figures for the period from 1871 to 1884, show that a substantial agreement by no means exists, and that this IS the case not only with the general trade, but also with the special trade. Converting the figures for both countries into marks, and considering the "general" trade of France (that is, export and import, inclusive of transit trade), we get the following results :— Gold. Silver. Average for the Years Import to England from France. British Statistics. Export from France to England. French Statistics. Import to England from France. British Statistics. Export from France to England. French Statistics. 1871-75- - 1876-80 - - 1881-81 - Million M. 40,., 62,» ' 36,0 Million M. 44,8 43,0 34,5 Million M. 23,7 36,1 39,5 Million M. 21,2 36,1 30,j Average for the Tears 1871-76 . 1876-80- 1881-84 - Gold. Export from England to France. British Statistics. Million M. 65,7 64,9 23,7 Import from France to IJngland. French Statistics. Million M. 72,6 Silver. 75,9 30,7 Export from England to France. British .Statistics. Million M. 37,8 22,7 9,4 Import to France fi'om England. French Statistics: Million M. 47.0 17,3 APPENDIX. 181 1. Movement of the Phecious Metals between England and France, 1871-84.* A. — Import to England and Export from France. App. XVI. Gold. Silver. Gold an 1 Silver. Years. Import to England from Prance. British Statistics. Export from France to England. French Statistics. Import to England from France. British Statistics. Export from France to England. French Statistics. Ini])ort to Kiigliuid from I'raucc. British Statistics. , Export from France to England. French Statistics. Average Discount of the Bank of England. 1871 . £ 3,708.203 Francs. 120,759,220 1,091,011 Francs. 14,020,302 4,799,214 Francs. 134,779,622 Per Cent. 2,87 1872 • 2,116.657 63,360,020 923,487 17,776,469 3,040,044 81,135,489 *.12 187S - 1,608,985 27,116,130 1,342,491 3,807,490 2,861,476 30,923,620 4.75 1871 ■ 7-W,395 8,942,680 1,172,272 5,930,258 1,912,667 14,872,838 3,71 1875 - 2,02-2,O(H 29,892,790 1,392,305 4,436,236 3,415,269 34,329,026 3,25 1S76 1,-127,02.1 12,774,992 1,340,828 14,571,260 2,767,862 27,346,252 2,62 1877 872,800 2,824,384 1,521,300 8,316,820 2,394,100 11,140,204 2,87 1S7S 5,908,078 61,302,688 1,740,657 19,388,449 7,648,736 80,691,137 8,75 1S79 2,905,323 62,969,480 2,346,684 31,74«,735 6,261,907 94,716,215 2,37 1880 2,118,036 37,522,168 2,068,635 12,969,335 4,186,671 60,481,503 2,75 1881 2,129,539 36,664,800 1,458,961 7,761,780 3,688,600 43,326,680 3,50 1SS3 1,832,361 19,824,562 2,643,208 21,080,888 4,475,569 40,905,440 *,12 1883 1,294,688 35,832.584 2,069,628 9,524,468 3,364,310 46,367,042 3,56 1884 - - - . 1,951,145 23,564,480 1,727,708 12,784,719 3,678,853 36,349,199 2,95 Average of the fears 1871-1875 .... 2,019,421 50,014,148 1,184,313 9,193,951 3,203,734 59,208,099 3,75 1S76-18S0 .... 2,646,262 35,478,742 1,80,3,601 17,396,320 4,449,853 62,875,062 2,87 1881-1881 .... 1,801,933 28,696,604 1,974,876 12,787,961 3,776,809 41,484,665 3,53 B. — Export from England and Import to France. Gold. Silver. Gold and Silver. Paris Ex- Tears. Export from England to France. British Statistics. Import to France from England. French Statistics. Export from England to France. British Statistics. Import to France from England. Fremih Statistics. Export from England to France. British Statistics. Import to France from England. French Statistics, London, 3 months date. Average France per 11. 1871 - - - . £ 1.669.171 Francs. 31,925,200 £ 1,239,904 Francs. 87,765,263 £ 2,809,075 Francs. 69,680,463 25,85 1872 .... 1,040.448 40,022,000 871,177 26,004,686 1,911,625 65,026,686 26,86 1873 .... 632,316 16,431,100 3,564,052 120,098,600 4,196,368 136,629,600 25,83 1874 .... 6,433,712 193,005,700 1,321,658 38,895,800 6,766,370 231,901,500 26,81 1875 6,251,444 162,694,000 2,449,730 64,840,945 7,701,174 227,534,946 25,« 1876 . . . - 4,188,666 109,406,640 1,832,919 33,705,800 6,021,486 143,112,440 25,33 1877 .... 6,147,604 168,408,240 767,574 14,973,400 6,916,078 183,381,640 25,31 1878 4,599,429 144,066,040 2,190,877 61,196,680 6,790,306 196,251,720 25,38 1879 .... 695,710 17,181,528 722,688 23,231,760 1,418,393 40,413,288 25,42 1880 .... 602,218 15,413,032 173,44^ 6,063,295 776,662 21,476,327 26,« 1881 .... 1,088,945 36,956,141 704,089 21,794,919 1,793,034 68,751,063 25,47 1882 ... . 3,289,947 77,219,120 350,213 18,234,570 3,640,160 90,453,690 25,50 1883 .... 101,234 1,860,480 188,915 8,454,986 90,149 10,315,465 26,55 1884 ... . 263,334 10,637,200 633,146 10,368,090 896,480 20,996,290 26,46 Average of the Years 1871-1875 .... 2,785,418 88,616,600 1,889,304 57,319,019 4,674,722 145,934,619 25,77 1876-1880 .... 3,246,685 90,892,896 1,137,600 36,834,187 4,384,185 116,727,088 26,39 1881-1384 .... 1,186,865 31,668,236 469,091 13,460,641 1,664,966 45,128,877 26,so * The figures in these tables (A. and B.) refer to the "special" trade (which excludes transit trade) for France.. The Preceding table gave figures for the " general " trade. There are considerable discrepancies uiboth tables, but they are more striking m the special trade. All subsequent tables for France give the figures of "special " trade. 182 tlOVAI, COMMISSION ON GOLD AND SILVER : App. XVI. There are many surprising and noteworthy points in these tables. Adding up the statements of the shipments of the precious metals in these tables between England and France, and converting pounds and francs into marks, we get the following results : — Gold. Silver. Gold and Silver. Import to England from France (British statistics). Export from France to England (French statistics). M. 610,722,000 433,801,000 M. 466,782,000 147,283,000 M. 1,067,504,000 681,084,000 Excess according to British > statistics - - -i 176,921,000 309,499,000 486,420,000 Import to France from England (French statistics). Export from England to France (British statistics). 819,372,000 698,080,000 375,637,000 340,208,000 1,195,059,000 1,038,288,000 Excess according to French") statistics - - -i 121,292,000 35,479,000 156,771,000 The export of the precious metals from England into France, that is, the imports into France from England, for the 14 years 1871-1884, are made by the French statistics nearly 167,000,000 marks .greater than by the English statistics, a yearly discrepancy of about 20,000,000 marks. On the other hand, the imports into England from France, that is, the exports from France to England, are made by the French statistics to appear less by 486,000,000 marks than by the English statistics, a yearly discrepancy of about 35,000,000 marks. This great discrepancy, remaining as it does even when a nuiQber of years are considered, renders it almost superfluous to point out the discrepancies in individual years. A few examples will suffice : In 1878 the English statistics give the import of gold into England from France at 5,908,078,1 (118,200,000 marks). But in the French statistics the corresponding export of gold from France to England is said to be 61,302,688 francs (49,000,000 marks). According to the French statistics there were imported into France from England, in 1883, 120,098,500 francs of silver (96,000,000 marks), while the British statistics for the same year stated the export of silver from England to France to be 3,564,052L (71,300,000 marks). Such great differences prove beyond doubt that there are mistakes in the statistical publications of one or both of the two countries. It is immaterial thai for some years, as a glance at the tables will show, the figures -tally more or less closely. This must be ascribed to accident, in face of the enormous discrepancies in other years. Moreover, there seems to be no general tendency in the vSriations, from which one could reach any condusions as to their causes. Let us turn now to a comi)arison of the mo.vement of the precious metals between England and the United States, following again the official statistics "of b6th countries. Here we encounter two difficulties. In the first place, we find that in the American tables at our disposal, for some years gold and silver are not given separately, but both metals are lumped together. In the next place, the American reports refer not to calendar years, but to fiscal years ending June 30. Comparisons can- therefore be readily made only for the averages of several successive years, and even then have only an approximate value. 2. Movement of the Precious Metals between England and the United States, 1871-1885. Years. Gold and Silver Export from England to the United States. Gold and Silver Import to the United Stales from England. Gold and Silver Import to England from the United States. Gold and Silver Export from the United States to England. 1871 . . - . £ 114,297 Mill. M. 2,3 Dollars. 111,996 Mill. M. 0,5 £ 12,181,473 Mill. M. 243,6 Dollars. 85,003,713 Mill. M. 357,0 1872 . . . - - - 563,633 2,3 12,861,978 257,2 66,189,206 236,0 1873 . . . - 2,418,817 48,1 498,570 2,1 9,166,295 183,3 .58,351,023 245,1 1874 .... 34,345 0,7 18,562,617 66,9 7,986,362 159,7 35,794,568 150,3 1875 .... 665,939 13,3 1,749,883 7,3 11,438,891 228,8 54,634,540 229,5 1876 .... 3,902,727 78,1 1,479,683 6,2 7,008,939 140,2 32,848,274 138,0 1877 .... 1,465,520 29,3 21,4«4,002 89.0 4,677,839 93,6 29,607,937 123,9 1878 .... 1,911,670 38,2 12,552,008 52,7 2,483,512 49,7 11,680,656 48,s 1879 .... 7,563,398 151,3 3,432,964 14.. 2,983,979 69,7 14,185,207 69,6 1880 .... 6,546,407 110,9 36,955,634 156,2 1,263,932 25,1 4,746,007 19,9 1881 .... 7,418,096 148,4 43,344,891 182,0 2,621,524 52,4 10,126.395 4S,5 . 1882 .... 121,622 2.1 13,330,810 66,0 8,022,249 160,4 36,129,679 151,7 1883 .... 986,165 19,7 2,008,633 8,4 2,813,820 66,3 13,967,417 58,7 1884 .... 2,192,135 43,8 3,124,383 18,1 7,701,410 154,0 37,884,698 169,1 1886 .... 305,343 6,1 6,664,076 28,0 3,659,652 73,2 14,984,801 62,9 Average of the Tears 1871-1875 .... 808,360 10,2 3,293,320 13.8 10,726,800 214,5 57,994,610 243,6 1876-1880 .... 4,077,724 81,6 16,164,866 63,7 3,681,640 73,6 18,673,616 78,0 1881-1886 . - - - 2,204,672 41,1 13,692,655 57,5 4,963,611 99,3 22,614,399 95k, In this table, as already remarked, individual years can- not be compared with each other, since the American statistics are arranged for fiscal years from July 1 to June 30. Even in comparing the averages of five-year or three-year periods, the effect of this difference must be taken into account. Taking now the fifteen years from 1871 to 1885 (or 1870-71 to 1884-85), we find that the British statistics state the total value of the export of the precious metals from England to the United States to be 34,645,000/. (693,000,000 marks). The American statistics, however, state the import of the precious metals from England to the United States to be 160,754,000 dollars (675,000,000 marks). The export of the precious metals from the United States to England, that is to say, the import of the precious metals into England from the United States, is stated in the English statistics to be 96,860,000?. (1,937,000,000 marks), and in the Amerioa^i statistics it is stated to be 495,913,000 dollars" (2,083,000,000' marks). This nearly close agreement, both for export and for import, in the two largest trading countries of the world, is certainly strong evidence of the approximate accuracy and practical trustworthiness of the figures. An agreement of this kind cannot be found on compar- ing the French and American statistics of the movement of the precious metals between France and th& United States--a movement which does not begin to attain dimensions as large as those of the trade between the United States and England. We are unable to give similar comparative statements in regard to the imports and exports of the precious metals to and from Germany, since Hamburg and Bremen are outside the customs lines and have separate statistics. APPENDIX. 183 3. Movement of the Precious Metals between Hamburg and England Direct by Sea. App. XVI. Av6rai5e Import to Hamburg from England. Export from Hamburg to England. Export from England ■ to Germany. Import to England from Germany. of the Years. Gold and Silver. Gold and Silver. Gold. Silver. Gold. Silver. Hamb. Statistics. Hamb. Statistics. Brit. Statistics. Brit. Statistics. Brit. Statistics. Brit. Statistics. 1872-1875 .... 1876-1880 .... In the Year 1881 1883 .... 1883 1884 - - - 1885 M. 131,639,975 96,019,988 32,861,480 17,699,980 7,654,720 7,073,160 78,039,850 M. 32,18S,.'i27 108,058,000 12,398,000 12,477,000 7,883,000 10,083,000 13,176,000 £ 5,488,036 3,020,223 610,919 599,802 189,018 288,296 3,159,932 £ 436,201 783,874 765,361 149,776 283,800 14,624 39,463 266,621 496,106 442,866 53,035 157,496 71,619 217,696 e 1,286,201 4,860,509 222,720 558,198 289,663 362,764 417,320 For the whole period from 1872 to 1885 the totals for gold and silver together are, in German money : — Marts. Imports to England from Germany (British statistics) - - 716,700,000 Exports from Hamburg to England (Hamburg statistics) - - 729,300,000 Exports from England to Germany (British statistics) - - 1,036,600,000 Imports to Hamburg from England (Hamburg statistics) - - 1,144,600,000 Great Britain, the United States, France, and Germany are of such preponderating importance in international trade that in a compendious publication like the present it is needless to extend this investigation to other countries. Total Exports and Imports of the Precious Metals in Different Countries. In order to complete those statistics of the internaiional movement of the precious metals, whose trustworthiness we discussed in the preceding paragraphs, we must present general statements of the exports and imports of the precious metals in the leading countries. It is true that even for those countries whose official statistics give fairly correct figures in regard to international trade, the returns indicate only with approximate truth the actuai movement of the precious metals. But, on the other hand, the same method is used in these countries year after year," and we get, therefore, a clue as to the general tendency from one year to another of each country's trade in the precious metals. The use of the precious metals in 'the' arts, which was discussed in Part III., necessarily causes the imports of the precious metals to exceed the exports in those countries which do not produce gold or silver. Moreover, a considerable inflow and outflow of the precious metals takes place in all countries through travellers and emigrants, while undeclared remittances take place, not embraced in the official statistics and very difficult to estimate. We now present the tables, so far as material is at hand, for longer periods. For the years previous to 1871 we give averages of several years, lest too much space should be occupied by this part of the compilation. 4. Imports and Exports of Precious Metals in Great Britain. Gold. Silver. Tears. Import. Export. Excess Import. Excess Export. Import. Export. Excess Import. Excess Export. Average for the Years 1858-1860 . - - - £ 19,225,169 £ 15,429,919 S 3,795,250 £ £ 10,622,011 £ 11,620,897 £ £ 898,886 1861-1870 .... 17,162,034 11,615,330 6,646,704 — 9,092,190 9,023,367 68,843 — In the Years 1871 .... 21,618,924 20,698,276 920,649 - 16,521,903 13,062,396 3,469,607 - 1872 . . . - 18,469,442 19,748,916 - 1,279,474 11,138,670 10,686,946 651,625 — 1873 .... 20,611,165 19,071,220 1,5.39,945 - 12,988,066 9,828,066 3,160,001 — 1874 .... 18,081,019 10,641,636 7,439,383 - 12,298,169 12,211,957 86,212 — 1875 . . . - 23,140,834 18,648,296 4,492,638 - 10,123,966 8,979,746 1,144,209 — 1876 .... 23,475,975 16,616,748 6,960,227 - 13,678,269 12,948,334 629,935 — 1877 .... 15,441,985 20,361,386 — 4,919,401 21,710,814 19,436,733 2,274,081 — 1878 .... 20,871,410 14,968,607 5,902,903 - 11,661,645 11,718,039 — 166,494 1879 . . . - 13,368,676 17,578,818 - 4,210,143 10,786,863 11,006,094 — 219,231 1880 ■ ... 9,465,861 11,828,822 - 2,373,961 6,799,022 7,060,681 — 261,659 Averapte for the Years 1871-1880 .... 18,463,429 17,006,162 1,447,267 - 12,749,718 11,683,899 1,066,819 - In the Tears 1881 .... 9,963,006 16,498,837 — 6,635,831 6,901,402 7,003,982 - 102,680 1882 .... 14,376,569 12,023,804 2,362,765 - 9,242,925 8,966,454 277,471 ■~ 1883 - - - 7,756,800 7,091,865 664,436 - 9,468,002 9,322,846' 146,156 — 1884 .... 10,744,408 12,012,839 - 1,268,431 9,633,495 9,986,383 — 352,888 1886 .... 13,376,561 11,930,818 1,446,743 " 9,433,605 9,852,287 418,68a 184 ROYAL COMMISSION ON GOLD AND SILVER ! Apf. XVI. The total recorded movement of the precious metals in the years 1871-1885 was :— Gold Silver Gold Silver Import. £ Mill. M. - 240,750,024 (= 4,816,o) - 172,176,605 (=3,443J Export. £ Mill. M. - 228,619,287 (=4,572,,) . 161,969,942 (= 3,239,4) The average annual excess of imports of gold was, 1871-86, 808,756?. (16,200,000 marks); of silver was 630,444?. (13,600,000 marks). The average annual excess of imports of gold in the period 1858-70 had been 5,142,523?. (102,900,000 marks); of silver had been 154,495/. (3,100,000 marks). The small net import of silver is explained by the considerable domestic production of silver from lead ores and from imported ores. The importations of gold and silver to England came from the following countries : — The Gold imported to England came from the following Lands : Periods. The Silver imported to England came from the following Lands : Periods. Australasia. United States. Other Lauds. Mexico, South America (excluding Brazil), West Indies. Grermany, Other Lands. 1861-1870 . . . 1871-1875 . - - 1876-1880 - - - In the Year 1881 .... 1882 .... 1883 .... 1884 .... 1885 .... £ 60,741,335 36,688,312 24,089,712 4,470,186 2,996,649 2,256,128 709,388 3,737,424 £ 68,312,606 30,720,680 7,743,671 23,191 6,099,783 9,777 6,072,094 909,041 £ 52,566,503 35,612,492 60,779,623 6,469,629 5,280,227 5,489,895 -i,962,926 8,730,093 1861-1870 - . - 1871-1876 . - - 1876-1880 . In the Year 1881 .... 1882 .... 1883 .... 1884 .... 1885 .... £ 48,698,580 16,398,266 15,916,603 1,965,615 3,308,682 3,787,881 4,397,298 3,688,5« £ 4,798,607 6,325,189 24,302,347 222,720 558,198 289,663 362.764 417,320 £ 37,424,811 «,347,209 24,208,363 4,713,067 6,376.015 5,390,468 4,873,433 6,327.741 In regard to the exports of precious metals from England to British India, see the tables given above (pp. 176-177). 5, Impoets and Exports of the Precious Metals in France. Gold. Silver. Years. . Import, Export, Excess Import. Excess Export. Import. Export. Excess Import. Excess Export. Average of the Yea 1861-1860 - PS Francs. . 413,994,000 Pranos. 96,569,000 Prancs. 318,435,000 Prancs. Prancs. 140,174,000 Prancs. 279,139,000 Prancs. Francs. 138,965,000 1861-1870 - - 466,431,000 266,417,000 191,014,000 - 196,492,000 166,027,000 30,466,000 — In the Year 1871 - 143,863,000 357,676,000 — 213,814,000 157,191,000 141,674,000 15,617,0,00 _ 1872 - 141,891,000 194,764,000 - 62,893,000 2«,874,000 138,624,000 102,260,000 _ 1873 - 176,694,000 284,233,000 - 108,639,000 889,034,000 207,536,000 181,498,000 1874 - 617,046,000 86,795,000 431,260,000 - 431,415,000 73,481,000 360,934,000 1875 - 608,014,000 137,693,000 470,321,000 - 266,782,000 81,410,000 185,342,000 1876 698,307,000 94,655,000 603,652,000 - 205,191,000 64,776,000 140,416,000 1877 - 634,697,000 98,961,000 435,736,000 - 148,156,000 43,198,000 105,960,000 1878 - 364,376,000 127,972,000 236,401,000 - 179,014,000 60,210,000 118,834,000 1879 - 194,009,000 361,627,000 - 167,518,000 137,839,000 02,176,000 76,663,000 1880 - 194,846,000 407,968,000 - 213,122,000 100,969,000 62,181,000 38,788,000 Average of the Ye 1871-1880 - irs - 347,261,000 216,123,000 132,138,000 _ 225,949,000 93,429,000 132,520,000 In the Year 1881 - 233,470,000 223,080,000 10,390,000 — 130,116,000 79,022,000_ 31,093,000 — 1S82 - 173,489,000 202,673,000 - 29,184,000 128,017,000 157,244,000 — 29,197,000 1883 64,570,000 134,864,000 - 70,294,000 81,440,000 95,944,000 — 14,504,000 1884 - 127,461,000 81,901,000 46,650,000 101,040,000 96,314,000 64,726,000 - APPENDIX. 185 The total movement of the precious metals in France in 1871-1884 was :— Import, Francs. Mill. M. Gold - - 4,071,591,000 (=;-i,257,,) Silver - - 2,700,137,000 (= li,! (,()„) .\pp. xvx. Gold Silver Export. Francs. Mill. M. - 2,793,752,000 (= 2.235,„) - 1,312,817,000 (= 1,050,3) The average annual excess of imports of gold in 1871- 1884 fl-as therefore !)1, 274,214 francs (73,000,000 marks) ; of silver, was 99,094,286 francs (79,300,000 marks) ; as compared with an average annual excess of imports of gold in 1851-1870 of 254,724,600 francs (203,800,000 marks); and of silver of 64,250,250 francs (43,400,000 marks). 6. Imports and Exports of the Precious Metals in Italy, 1862-1877 (according to Custom-house Returns). Gold and Silver. Gold and Silver. Import. Export. Excess Import. Excess Export. 1862 1863 18M I860 1866 1S67 1868 1869 1870 ..... 1871 1873 1873 ..... 1874 1875 1876 1877 Lire. 154,702 209,595 154,430 34,465 1,364,170 1,481,877 1,457,665 1,512,700 1,350,610 2,242,415 4,101,706 25,482,131 9,347,410 8,389,584 20,142,515 14,722,378 Lire. 1,046,970 402,416 189,763 743,440 4,691,000 7,753,740 1,473,710 157,040 974,550 10,870,041 4,938,420 1,765,770 7,269,926 11,391,681 8,356,.398 19,221,108 Lire. 1,365,660 376,060 23,716,361 2,077.484 11,786,1X7 Lire. 892,268 192,821 35,332 708,975 3,326,830 6,271,863 16,045 8,627,626 836,71 3,002,097 4,498,730 Imports and Exports of the Precious Metals in Italy, 1878-1886 (according to Custom-house Returns) Tears. Gold. Silver. Import. Export. Excess Import. Excess Export. Import. Export. Excess Import. Excess Export. 1878 .... Lire. 7,864,120 Lire. 20,44.3,940 Lire. Lire. 12,579,820 Lire. 3,823,510 Lire. 26,268,870 Lire. Lire. 22,435,360 1879 .... 9,455,160 33,218,240 - 23,763,080 6,167,760 1,943,110 3,224,660 — 1880 . 15,435,660 16,871,500 « 4.36,940 24,035,946 12,943,390 11,092,666 — 1881 .... 74,361,300 20,50.3,100 63,868,200 - 18,937,770 7,472,310 11,466,460 — 1882 - 63,959,900 1,156,100 62,804,800 - 66,456,260 6,104,430 50,361,820 • 1883 .... 42,075,000 8,.373,700 .33,701,300 - 62,008,026 9.946,930 42,062,095 - 1884 - - - - 20,428,800 11,768,100 8,660,700 - 6,666,600 19.243.125 - 13,586,626 1885 ... - l1.fi!«,7U0 101,3,37,300 - 89,6.39,100 105,772,106 s7.1(;i.9Sn 18,607,125 - 1886 (5 months) 4,037,100 3,528,100 509,000 — 22,800,780 20,090,640 2,710,240 — It has already been mentioned that Professor Ferraris has called attention to the errors of the customs s^^atistics on the exports and imports of the precious metals in Italy, and has made an endeavour to secure statistics from other sources which certainly come closer to the facts. These latter are based upon statements of the gold and silver shipments of the railroads and steam-ship companies through whose hands remittances pass. The result of his in\'estigations for the years 1883, 18S4, 1886, and the first five months of 1886, was as follows : — — 1883. 1884. • 1885. 1886 (the first 5 months). Import of gold • - Lire. 40,038,683 Lire. 19,606,846 Import of gold Lire. 13,936,016 Lire. 9,708,301 Export „ „ 17,661,352 19,460,239 Export „ „ - - 129,316,172 8,268,511 Excess Import 22,477,331 146.607 Excess Import — 1,439.700 Import of silver 68,933,630 9,271.863 „ Export 116,379,166 — Export „ „ . . 8,772,204 27,438,723 Import of silver 121,893,768 16,467,698 Excess Import 64,161,326 - Export „ „ - - 130,316,280 28,017.618 „ Export - 18,166,870 Excess Import — — Export 8,421,512 11,649,920 o .'.46-18. A -A 186 BOYAL COMMISSTO>f ON GOLD AND SILVKJ; : An.. XVI The customs statistics, on the other hand, indicated for exports of 89,639,100 lire and an excess of silver imports 1883 an excess of gold imports of 33,701,300 lire, and o .,f 18,607,125 toe. For the first five months of 1886 they silver imports of 42 062,096 lire ; for 1884 an excess oi indicated an excess of gold imports of 509,000 lire, and of gold imports of 8,660,700 lire, and an excess of silver silver imports of 2,710,240 lire, exports of 13,585,625 lire; for 1886 an excess of gold 7. Imports and Exports of Precious Metals in the United States, 1860-51 to 1884-S5. Gold and Silver. Tears. Impon. ' Export. I-- 1831-1865 Dollars. 6,151,817 Dollars. 39,432,623 Dollars. 34,280,703 1856-1860 10,389,770 69,589,841 49,204,071 1861-1863 ■2t,112,923 43,611,777 19,498,854 Fiimncial Ycary Import. 1871 1872 1873 1S74 1873 1876 1S77 1878 1870 1880 1881 1882 1884 1885 A 1861-1870 - 1871-1875 - 1876-1880 - 1881-1883 - .'VvoraiiX'. Dollars. 6,883,561 8,717,458 8.682,447 19 .503,137 13,696,793 7,992,709 26,246,234 13,330,216 6,624,948 80.758,396 100,031,269 34,377,054 17,784,149 22,831,317 26,691,696 11,117,584 11,496,679 26,790,500 40,.333,096 Gold. Silver. Export. Excess Import. Excess Export. i Import. Export. Excess Import. Excess Export. Dollars. 66,686,208 Dollars. Dollars. 59,802,647 Dollars. 14,386,463 Dollars. ,31,755,780 Dollare. Dollars. 17,369,317 49,548,760 - 40,831,302 5,026,231 30,328,774 25,.302,543 44,856,715 - 36,174,268 12,798,490 39,761.869 - 26,953,369 31,042.420 - 14,33;i,283 8,961,769 32,5S7,!I85 ■ — 23,6.36,216 66,980,977 - 63,284,184 7,203,924 25,161,165 - 17,!il7,241 .31,177,050 23,184,341 7,!J43,!|-3 26,329,252 - 17,386,280 26,590,374 .344,140 11,528.181) 29,571,863 - 13,043,683 il.'201,45.-) 4,12.5,760 - 16,491,090 24,535,670 - 8,041,571 4,587,614 1.037,334 - 14,671,052 20,409,827 - 6,738,773 3,6.39,025 77.119,371 - 12,27.5,914 13,603,894 - 1,237,980 2,566,132 97,466,127 - 10.544,2.38 16,841,715 . - 6,297,177 32,587,880 1,783,174 - 8,095,336 16,829,699 - 8,73 1-,2«3 11,600,888 6,138,261 - 10,765,242 20,219,145 ! — !l.401,2n.3 41,081,967 - 18,250,640 14,594,945 26,051,326 - ll,t.56,3Sl S,+77,8!I2 18,213,804 - 16,660,627 33, 753. 63:5 - 17,303,006 68,757,487 - 47,639,903 6,469,798 16,818,279 — ' ll,3l--<,tNl 52,423,016 - 40,926,337 9,673,375 31,915,112 — i 22,2H.737 15.039,703 11,750,797 - 13,182,043 22,670,101 - 9.1,8S,()0S 19,262,750 21,070,346 — 12,108,078 22,739,144 — 10,631,061-, In the official statistics of the United States separate statements of the export of domestic gold and silver were not made before the year 1864. We have, therefore, taken the two metals together up to that year. The distinction between the export of precious metals of domestic and of foreign production is of no importance for our purposes. It is obviously of no consequence for the monetary con- ditions of a country whether the gold and silver exported from it has originally been produced there or elsewhere. Moreover, the authorities in the United States themselves doubt whether the distinction, as made in their statistics, rests on a better foundation than uncertain surmise. Taking, then, the recorded import and export of the precious metals in the whole period from 1850-51 to 1884-86, we find- Dollars. Import to United States of gold and silver -• - - 834,067,000 Export from United States of gold and silver - - - 1,97.5,227,000 E.xcess export - - - l,I4I,17l>,00l) The production of silver in the United States did not begin to attain a considerable development till the close of the decade 1860-70, and up to that time we may assume that the precious metals produced in the United States were almost exclusively gold. Assuming this, we are able to state approximately the exports and imports of gold and silver in the United States for different periods, as follows. Our calculations are made in German gold : — Periods, Gold. . Silver. Gold and Silver. Import. Export. Import. Export. Import. Export. 1851-1853 .... Mill. M. •58,6 Mill, M. 54., Mill. M. 49.0 Mill. M. 773.7 Mill. M. 108,2 Mill. M. 828,1 18.56-1860 .... 100.1 78.r, 118,0 1,172.8 218,1 1,251., 1861-1865 - - - - 333,5 858,0 66,0 418,3 400,1 1,276,3 1866-1870 . - - . 252.,; 1,059,5 138,8 435,7 391,, 1,496,2 1871-1875 . - . . 241., l,100.s 203,1 67(1.; 411,; 1,771,0 1876-1880 - - - 562.r, 316,8 276,8 476.1 8.39,1 791,0 1881-1886 .... 847,0 404.r, 254,2 477,3 1,101,2 882,0 Total .... 2,395,8 3,871,6 1,107,1 4,424,3 3,602,0 8,295,0 - - / APPENDIX. 187 8. Import and Export op Piircious Metal in the Germax Customs District, 1872-1885 App. XVI. Gold. Silver. Years. Import. Export. Excess Import. Excess Export. Import. Export. Excess Import. Excess Export. 1873 . . . - M. o5.'J8(l,(l01> 101,880,000 J[, (»i;,(i(io,oi)o 171,000,001) 72,(i;iij,()00 M. 98,910,000 M. 1873 :!5-U«lll.(HKI 52,l>;i,''),OIIO 301,01 i."),flOO - 117,300,000 13|,,100,l)00 13,200,000 _- 1S7'1 > - - ■ 17,.'3jO.(HK) 35,100,000 - i7,rt-o,ooo 60,640,000 7i,7i;(;,(«in — 21,126,000 1S73 .... 15,*Hl.0(lll 28,000,000 - 12,ii;)(i,(ii)[i 30,320,090 38,88(1,000 — 8,560,000 1870 .... 8S,20(t.(l0l) 22,-100,000 65,800,000 - 23,0111,011(1 36„334,000 _ 12,294,000 1ST7 . . . - 73,0(10.(100 46,600,000 26,500,000 - 2r),SGo,ono 19,650,000 10,204,000 -_ 1S7S . . - - lOS.OOO.doO 1,400,000 107,200,000 - 40,000,000 27,924,000 12,076,000 — 1S7!> . . - - S(j.SOO.(RI(t 5,000,000 81,200,000 - 32,750,000 40,200,000 — 7,450,000 18SII .... ■io.S.jll.OOO 2i»,l>.s3,0ll0 — 8,883.000 18,346,000 21,(t81,0(l{l - 2,73,8,000 ISSl . . . - 1-1,078,000 i.'j,(;«,(ioo - 31,567,000 13,205,000 17,503,000 — 4,298,000 1832 2S,(itl,000 39,226,000 - 10,585,000 6,518,000 14,362,000 — 7,844,000 l » — 45,497,000 93,774,000 48,277,000 1381 - „ „ — - .38,929,000 98,600,000 69,571,000 1882 - •J ., 33,197,000 21,391,000 64,691,000 &6,934,000 42,343,000 1883 - „ June - 34,542,000 20,983,000 56,626,000 91,178,000 36,653,000 „ December 39,401,000 24,021.000 (13,422,000 113,388,000 49,966,000 1884 . „ June - 43,059,000 17,779,0011 60,838,000 100,609,000 45.771,000 „ December 46,883,000 25,846,000 72,729,000 121,272,000 48,64S,000 1885 - June - 47,140,000 18,664,000 65,794,000 113,305,000 47,511,000 „ December 49,163,000 20,438,000 69,501,000 124,111,000 64,610,000 1886 ■ „ Jnne - 49,884,000 ^7,398,000 67,282,000 113,257,000 46,975,000 1.9-; ROTAL OOMMISSION ON GOLD AND SILVER : App. XVI. Tears. Bank Returns. ITALIAN BANKS OF ISSUE. Metallic Reserve. Note Circulation. State I'aper Money. Gold. Silver. Total. Total. . Uncovered 1 1881 - End of December - Lire. 1 Lire. 49,672,321 Lire. 49,672,321 Lire. * 107,878,670 , Lire. 68,006,349 Lire. 1865 - „ „ " " 127,998,925 127,998,926 170,396,250 42,397,326 — 1870 - „ „ - - 77,234,797 168,474,219 246,709.016 442,436,438 , 196,726,422 - 1S7I - „ „ - - 93,339,258 127,960,836 221 ,.300,093 677,673,623 356,273,630 - 1872 - „ „ - - 91,879,250 112,554,645 204,4.33,895 623,382,264 418,948,369 - 1873 - „ „ - - 91,465,728 117,837,3112 209,.303,090 664,329,910 455,026,820 — 1874 - „ „ - - 90,971,133 110,986,718 201,956,851 633,229,800 431,272,949 - 1875 - „ ., - - 67,266,762 76,025,228 143,281,990 621,237,832 477,955,842 — 1876 - Juno 70,073,057 7.6,419,266 146,492,313 589,904,496 444,412,182 _ „ December - 76,494,492 73,478,072 148,972,664 646,029,437 497,056,873 — 1877 ■ „ June 76,277,008 72,614,639 148,791,647 664,193,759 616,402,112 — December - 76,806,285 72,627,127 149,332,412 628,660,692 479,228,180 — 1878 - „ June 77,440,013 71,717,212 149,167,226 629,020,664 479,863,439 — „ December - 79,364,617 71,595,117 160,959,7.34 672,283,318 621,323,684 — 1879 - „ June 80,424,783 69,167,259 149,.5S2,042 698,184,164 54S,602,122 — December - 80,127,468 67,388,642 147,816,110 732,443,334 684,627,224 — 1880 - „ June 71,924,336 66,600,965 138,526,300 719,17.5,535 580,960,236 — „ December - 77,616,701 07,371,989 174,988,690 748,968,280 673,979,590 — 1881 - „ June 74,200,218 66,614,347 139,714,565 730,458,719 590,744,164 — „ December - 71,304,720 63,673,306 134,878,026 735,579,197 600,701,171 — 1882 - „ June 76,986,905 62,686,617 139,672,622 732,767,109 59.3,094,687 — „ December - 77,198,478 80,762,920 167,961,398 732,373,667 674,412,269 — 1883 - „ June 156,603,576 103,069,572 259,673,147 764,026,019 504,462,872 3,772,985 „ December - 220,24«,999 99,303,063 319,662,062 793,915,066 474,363,004 89,885,660 1884 - „ June 259,846,199 96,149,626 356,995,824 841,868,170 486,862,846 218,166,210 „ December - 306,694,349 64,893,886 370,688,235 890,096,974 528,608,739 272,179,960 1886 - „ June 288,821,967 r,T,V)V,:v2 339,924,599 920,835,593 580,910,994 289,948,330 December - 280,606,270 66,016,463 336,621,733 918,131,677 611,829,944 297,122,i;60 1886 - „ June 300,118,270 64,934,320 365,052,500 996,892,282 631,839,692 306,094,720 In Italy the reserve for notes in circulation includes not only the precious metals held by the banks, but also copper coins up to x57;o of the total to be covered, and the old note issues and Government paper money, both of these latter being now redeemable at the public Treasury in gold or silver. Taking these into consideration, we find that the uncovered note circulation of the Italian Banks of Issue was as follows, at the end of the years : — Lire. 1861 186.5 1871 1876 1877 1878 187.9 1880 58,006,349 42,397,326 270,107,510 345,831,585 363,298,626 356,351,911.' 409,482,973 413,128,425 1881 1882 1883 1884 1885 Lire. 438,848,645 428,870,437 344,385,458 404,751,938 514,756,778 By an Act of April 7, 1881, and by regulations for the e-xecution of that Act, of date June 16, 1881, and March 1, 1883, the Government was empowered to issue 340,000, on;' lire of Go vrenment paper money— 240,000,000 lire in'lO- lire pieces and 100,000,000 lire in 5-)ire pieces. The issue began in April 1883. The coin holdings of the Govern- ment Treasury amounted, on December 31, 1883, to 467,069,283 lire in decimal coins and 8,197,623 lire in other coins, chiefly old Bourbon ])iastres ; on December 31, 188-1, to .355,606,321 and 26,821,689 lire respectively • on December 31, 1885, to 222,000,000 lire and 77,000 000 lire respectively. ' APPENDIX. 193 NATIONAL BANK IN BELGIi;.!!. Years. Bank Returns. Metallic Reserve. Note Circulation. Gold. Silver. Total. Total. Uncovered. Francs. Francs. Francs. Francs. Francs. 1860 - End of December 1,421,500 01,602,500 03,024,000 117,900,000 64,876,000 ISCl ■ i» j> - - 69,048,600 117,84«,000 48,799,500 1865 - „ - - 56,074,000 125,106,000 70,032,000 1870 - ,. 24,463,000 71,162,000 95,615,000 202,528,000 106,913,000 1871 - .. 38,985,000 84,286,000 123,271,000 228,690,000 105,419,000 187i - ■ . ■ „ 37,879,000 77,791,000 115,670,000 297,672,000 182,002,000 1873 - „ June - - - 139,844,000 351,975,000 212,131,000 „ December 37.806,000 67,687,000 103,493,000 320,686,000 216,093,000 1874 - Juno - 41,100,000 60,978,000 102,1.38,000 300,298,000 198,160,000 „ December 68,444,000 59,803,000 118,247,000 328,874,000 210,627,000 1875 - M June - 66,685,000 66,038,000 122,723,000 322,153,000 199,430,000 „ ' December 77,906,000 44,757,000 122,662,000 340,254,000 217,592,000 1876 - „ June - 77,330,000 58,507,000 135,837,000 330,674,000 194,837,000 „ December 79,040,000 37,635,000 116,675,000 364,560,000 247,885,000 1877 - „ June - 69,070,000 35,980,000 105,050,000 345,536,000 240,486,000 December 61,200,000 38,050,000 99,260,000 342,108,000 242,858,000 1878 - „ June - 60,580,000 29,970,000 90,650,000 325,120,000 234,570,000 December 61,330,000 37,840,000 99,170,000 313,620,000 214,450,000 1879 - „ June - 62,880,000 40,600,000 103,380,000 309,950,000 206,570,000 December 71,635,000 33,780,000 105,415,000 834,975,000 229,660,000 1880 - „ June - 61,655,000 32,745,000 94,400,000 311,070,000 216,670,000 „ December 73,063,000 25,727,000 98,790,000 339,970,000 241,180,000 1881 - „ June - 77,510,000 26,315,000 103,826,000 331,376,000 227,550,000 „ December 77,340,000 22,135,000 99,476,000 354,766,000 255,280.000 1882 - „ June - 62,445,000 31,816,000 94,260,000 331,185,000 239,925,000 „ December 71,885,000 27,560,000 99,445,000 355,700,000 256,25.5,000 1883 . „ June - 69,320,000 22,600,000 91,920,000 336,720,000 244,800,000 ., December 71,885,000 26,216,000 98,100,000 357,610,000 269,510,000 1884 - June - 64,895,000 30,465,000 95,360,000 340,300,000 244,940,000 December 65,926,000 80,610,000 96,535,000 367,760,000 261,225,000 1885 - „ Juno - 60,010,000 ,16,410,000 96,420,000 346,490,000 250,070,000 December 69,600,000 32,700,000 102,200,000 367,000,000 264,800,000 1886 - June - 64,700,000 40,000,000 104,700,000 367,000,000 253,300,000 Arr. XVI 54648. Bb 194 EOyAL COMMI8SION ON GOLD AND SILVER : App. XVI. Years. 1860 1861 1856 1861 1870 1871 1872 1873 1874 1875 1876 1877 1878 187& 1881 18S2 1884 1885 188G Bank Returns. End of December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - „ December „ June - M December „ June - „ December „ June - „ December ,1 June - „ December „ June - M December „ June - „ December „ June - „ December „ June - ,1 December „ June - » December w June NETHERLANDS BANK. Metallic Reserve. Gold. Silver. Total. Gulden, 6,522,613 27,969,273 27,969,273 27,833,079 39,972,292 66,297,669 66,297,886 61,180,968 69,260,690 64,457,302 64,267,952 74,792,866 60,609,237 44,398,531 44,634,172 68,837,689 73,426,269 80,378,866 66,861,791 60,440,142 18,168,479 21,868,007 6,272,728 45,948,971 23,606,960 43,437,440 27,146,841 41,630,677 47,904,000 77,004,000 Gulden. 79,393,236 92,477,888 99,548,945 74,278,687 68,249,588 99,864,266 87,403,449 96,439,653 76,908,631 95,144,360 109,9.57,309 118,138,726 138,301,458 125,94«,177 92,863,625 78,078,371 68,621,280 76,958,647 82,216,088 80,180,888 89,617,731 97,627,688 89,261,289 76,841,036 76,867,697 70,639,262 77,217,843 77,260,300 80,901,513 81,360,905 84,8 tW26 89,646,666 89,036,713 92,043,630 92,347,767 95,105,212 93,363,465 94,887,583 93,378,017 96,293,652 96,916,000 98,472,000 Gulden. 79,393,235 92,477,888 99,548,945 74,278,687 68,249,688 99,864,266 87,403,499 95,439,663 76,908,531 95,144,360 109,967,309 118,138,726 143,823,971 153,916,460 120,832,798 105,911,450 108,493,672 133,266,106 137,513,974 141,361,856 158,768,421 161,984,890 163,519,241 161,633,901 127,376,934 114,937,783 121,862,016 146,147,989 164,326,772 161,729,771 141,706,217 140,086,708 107,194,192 113,911,637 97,620,495 141,064,183 116,870,426 138,326,029 120,519,868 130,824.129 143,820,000 376,476,000 Note Circulation. Total. Uncovered. Gulden. 62,096,915 51,970,990 60,491,445 ■ 91,478,045 79,602,145 100,574,100 102,359,620 114,869,095 106,950,330 130,634,890 144,106,040 146,837,490 157,141,810 164,622,416 158,802,630 159,722,950 107,961,995 169,662,980 176,197,000 180,698,590 186,102,595 181,236,960 190,233,430 195,363,235 200,119,426 193,647,360 186,098,880 187,325,580 189,668,690 188,261,960 198,549,605 200,983,440 195,941,100 183-,431,625 189,139,295 185,071,630 187,719,110 190,549,260 193,608,095 184,776,875 192,432,000 198,396,000 Gulden. 17,199,368 11,362,657 709,834 14,956,171 19,429,442 29,041,799 35,490,530 34,148,731 28,198,764 13,317,839 10,706,966 37,969,832 63,811,500 69,458,423 86,306,874 37,683,026 89,336,784 27,334,174 19,261,070 36,714,189 43,729,334 72,742,491 78,609,667 64,246,865 41,177,691 85,341,918 26,632,179 66,843,288 60,896,732 88,746,908 69,619,988 91,618,800 44,017,447 70,848,685 52,224 221 72,988,237 47,962,746 48,612,000 22,920,000 APPENDIX. 195 Tears. Bank Returns. 1850- 1851- 1856 - 1861 ■ 1865 - 1870 ■ 1871- 1873 ■ 1874- 1875 ■ 1876 • 1877- 1878 ■ 1879 ■ 1880- 1881 • 1882 ■ 1883 . 1884- 1885 • 1886- App. XVI. AUSTBO-HUNGARIAN BANK (foemeelt Pkivath Austeiah Wationai, Bamk). Metallic Eeserve. Gold. Silver. Total. Bank Note Circulation. Total. Uncovered. End of December - „ June „ December -" June December - „ June December - „ June „ December - „ June „ December - June „ December - „ June „ December - „ June „ December - „ June December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - „ June „ December - June „ December - „ June „ December - ,, June Gulden. 6,741 5,741 5,741 788,383 3,026,984 2,243,129 2,148,846 1,607,209 l,.507,10o 234,223 1,424,922 6,379,122 44,403,430 48,308,711 69,403,968 79,085,409 70,627,742 73,246,683 72,741,309 68,037,247 67,854,046 66,938,712 70,222,013 66,792,753 67,376,206 67,374,695 67,.374.695 69,801,083 58,631,872 58,634,7.39 05,010,262 55,487,010 68,726,633 64,896,332 79,172,407 68,440,314 77,682,063 64,208,220 78,822,133 69,272,679 69,072,718 63,820,000 Gulden. 33,912,540 44,938,821 44,963,298 63,366,408 88,676,656 87,536,122 97,000,036 116,197,124 120,014,664 112,847,960 112,902,263 115,361,682 99,093,014 71,632,316 73,529,370 65,324,948 73,308,949 69,169,939 66,627,580 69,961,608 66,662,848 69,669,323 66,386,770 69,823,768 70,077,483 70,077,483 86,486,777 91,833,640 105,613,790 108,243,960 103,291,361 116,893,653 123,130,826 109,636,513 114,667,302 119,856,976 121,696,816 125,062,647 126,668,176 126,471,815 129,723,317 134,610,000 Gulden. 83,918,281 44,944,662 44,969,039 64,161,789 91,602,640 89,778,261 99,148,381 116,704,333 121,621,769 112,682,873 114,327,176 120,730,704 143,496,444 119,841,027 142,933,328 144,410,362 143,836,691 142,416,521 139,368,889 137,998,765 134,416,894 136,598,035 136,607,783 136,616,611 137,463,688 137,462,078 163,860,872 161,634,723 164,246,662 166,878,889 173,301,613 171,380,663 190,866,369 174,632,845 193,739,709 188,297,289 199,378,868 189,270,767 206,390,308 195,744,394 198,796,035 198,430,000 Gulden. 268,136,682 252,761,059 226,418,345 386,633,979 399,190,139 473,144,397 468,874,423 842,412,662 361,100,766 278,494,660 296,893,160 282,063,760 317,333,630 294,603,180 ,318,365,470 338,572,460 368,942,580 302,142,430 293,762,350 291,471,060 286,242,330 274,706,560 296,910,060 269,686,440 282,267,900 266,8S4.,010 288,799,000 288,423,260 316,769,400 306,082,160 328,622,890 310,006,220 364,207,680 343,267,090 868,633,710 360,822,160 380,467,420 386,61-8,360 376,725,030 343,924,160 363,603,020 363,430,000 State Note Circulation. Gulden. 284,217,301 207,806,497 181,449,306 322,482,190 307,587,499 383,368,146 369,726,042 225,708,.329 229,678,986 185,911,687 182,666,985 161,333,058 173,837,086 174,682,163 176,432,142 194,162,098 216,105,889 169,726,909 164,393,461 163,472,305 161,825,436 138,108,615 169,302,277 132,948,929 144,814,212 129,381,932 134,938,628 136,788,637 162,613,738 139,203,461 166,321,277 138,826,667 163,361,201 168,734,246 174,894,001 172,624,861 181,078,562 178,277,693 170,334,723 148,179,766 164,806,986 166,000,000 Gulden. 316,037,082 352,113,519 369,636,749 37.3,600,894 376,860,514 376,991,886 - 376,882,873 344,033,270 320,730,163 345,282,194 336,206,968 346,501,033 332,056,319 365,444,167 344,948,998 346,961,161 338,288,177 364,002,389 321,012,022 313,030,626 312,429,881 327,737,769 321,133,339 320,434,947 313,187,800 351,493,795 333,146,609 360,961,770 326,413,700 364,248,072 313,794,984 338,248,952 Bb 2 196 ROYAL COMMISSION ON GOLD AND SILVER: .XVI Imperial Bank and OTHEK Note Banks in Germany. Years. Bank Eeturns. Imperial Bank (Prussian Bank). German Note Banks (including Imperial Bank). Metallic Beservfi. Note Circulation. Metallic Reserve. Note Circulation. Total. Uncovered. Total. Uncovered. 1861 - End of December - M. 63,248,000 M. 61,052,000 M. M. M. M. 1856 - „ J, - - 67,50-1,000 141,406,000 73,901,000 - - - 1861 - »t " ■ " 266,697,000 308,730,000 42,033,000 - - - 1806 - » It ' ~ 209,274,000 376,275,000 167,001,000 - - -. 1871 - i> )» " " 574,309,000 7?ft726,000 152,417,000 - 1,056,699,000 - ISTl - „ „ ' - 553,239,000 934,693,000 381,354,000 - 1,368,800,000 - 1873 - » jj " " 703,209,000 898,719,000 195,610,000 - 1,360,991,000 - 1874 - M » * " 610,633,000 838,432,000 227,839,000 - 1,259,040,000 - 1S75 - .. .> - - 438,013,000 735,723,000 297,680,000 609,909,000 1,050,467,000 440,548,000 1876 - .) - - 500,593,000 766,107,000 265,515,000 610,910,000 989,170,000 378,260,000 1877 - „ June 547,931,000 755,279,000 207,348,000 614,226,000 952,454,000 308,228,000 „ December ■ 452,173,000 715,830,000 263,637,000 542,247,000 918,102,000 375,855,000 1878 - Jime 509,068,000 672,898,000 162,930,000 695,657,000 86.3,012,000 267,455,000 „ December - 472,111,000 663,737,000 191,626,000 660,211,000 857,761,000 . 297,660,000 1879 - „ June 6'16,083,000 745,096,000 199,012,000 634i56 1,000 932,466,000 297,903,000 „ December - 639,373,000 792,808,000 253,435,000 626,399,000 990,083,000 363,684,000 1880 - „ June 682,114,000 814,303,000 233,189,000 665,411,000 1,012,027,000 316,616,000 „ December - 522,417,000 806,118,000 283,701,000 614,939,000 1,007,650,000 392,711,000 1881 - „ June 582,188,000 839,184,000 256,996,000 665,043,000 1,036,635,000 371,493,000 December - 514,440,000 859,388,000 344,948,000 696,581,000 1,067,963,000 461,372,000 1882 - „ June 669,929,000 528,003,000 258,074,000 650,235,000 1,023,854,000 373,619,000 „ December - 558,7.10,000 831,131,000 272,401,000 642,391,000 1,033,569,000 391,178,000 1883 - „ June 61.1,409,000 820,428.000 204,929,000 694,686,000 1,012,794,000 318,208,000 „ December - 658,677,000 829,713,000 271,136,000 643,473,000 1,029,831,000 386,368,003 1884 - „ June 612,661,000 819,065,000 206,404,000 694,300,000 1,016,750,000 332,450,000 „ December - 617,828,000 864.137,000 336,309,000 602,069,000 1,061,578,000 459,609,OOC 1885 - „ June 597,103,000 814,427,000 217,324,000 678,196,000 1,012,815,000 334,619,000 „ December - 618,242,000 858,925,000 240,883,000 700,976,000 1,061,623,000 300,647,000 1880 - „ June 705,190,000 910,130,000 204,940,000 787,193,000 1,107,383,000 320,090,000 The directors of the Imperial Bank of Germany thought that they could not comply with our request, in so far as it inquired about the proportion of their gold holdings to their other coin holdings, in the same way as that request had been complied witli by the other more important banks. The question of making public statements in regard to this proportion had been considered several years before, and it had been concluded to make no such state- ments since the statute establishing the bank had not contemplated them. In the absence of authentic statements we are compelled to make an estimate, probably close to the truth, of the gold holdings of the Imperial Bank. Such an estimate is needed the more, as foreign periodicals of high standing — for example, the London " Economist," on February 7, 1885 — put the holdings at a figure obviously too low, namely, 6,725,00(1/. A notice published in September 1880, which was not contradicted and whose accuracy we have no reason to doubt, states that the coin holdings of the Imperial Bank at that time consisted of 185,000,000 marks of imperial gold coin, 317, 199,608 21,600,245 21,799,863 37,267,309 15,467,456 1865 - » » 2,797,070 12,860,758 15,657,828 30,509,648 14,861,820 1870 - „ „ 6,997,812 16,941,886 23,939,693 29,309,339 5,869,641 1871 - J) H 11,476,972 19,336,798 30,813,770 31,278,786 465,016 1872 - »J » 6,657,715 16,215,140 22,872,855 46,261,825 22,388,970 1873 - „ „ 14,915,800 14,436,971 29,352,771 44,725,616 15,372,845 1874 - )» »> 15,887,181 10,572,936 26,460,067 40,565,966 14,105,899 1875 - » M 10,626,078 9,905,832 20,530,910 36,178,218 15,647,808 1876 - 11 *J 10,343,796 3,942,660 14,286,456 30,079,116 15,792,669 1877 - „ „ 8,764,498 3,591,429 12,Ji45,927 26,948,707 14,602,780 1878 - )» » 5,914,727 4,845,125 10,759,852 26,902,616 16,142,764 1879 - 1» » 11,439,683 6,435,026 16,874,708 31,586,608 14,711,900 1880 - M t! 11,841,078 4,384,987 16,226,065 39.403,725 23,177,660 1881 - „ „ 11,639,489 3,957,682 15,597,171 37,798,325 22,201,154 1882 - . - „ It 12,485,336 3,481,716 15,967,052 37.380,309 21,413.257 1883 - „ „ 12,102,795 2,848,606 14,951,401 35,668,473 20,717,072 1884 - W ») 13,119,484 2,951,162 16.070,646 37,992,776 21,922,180 1885 - ). . 13,744,000 3,109,000 16,853,000 39,341,000 22,488,000 1886 - „ June 12,783,000 3,671,000 16,454,000 42,837,000 26,383,000 The " Einskilda Bankerna," as the private banks of issue are called, were not required to redeem their notes in gold till 1875. Their cash, however, consists mainly of notes of the Bank of Sweden, which are legal tender. In the following table their holdings of such notes are stated : — Tears. Bank. Iteturns. Metallic Reserve and Imperial Bank Notes. Gold. Imperial Bank Notes. Total. Note Circulation. Total. Uncovered. 1875 ■ 1876 ■ 1877 ■ 1878 ■ 1879 ■ 1880 ■ 1883 ■ 1884 ■ 1885 ■ 1886 ■ End of June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December „ June „ December ,. June Kronen. 6,166,766 8,943,368 8,023,991 8,733,524 8,624,125 8,766,664 8,579,291 S,762,:i71 8,233,495 8,618,904 8,696,300 8,851,931 8,388,297 8,018,378 7,890,960 8,288,380 8,286,575 8,600,000 8,203,484 8,294,989 7,898,727 7,882.000 7,849,000 Kronen. 8.437,404 7,413,008 8,017,660 6,609,839 6,638,524 6,439,497 7.167,189 C.771.532 11.290,952 0,621,449 10.475,446 9,802,908 9,150,549 10,417,973 8,708,530 ■ 8,115,133 9,104,231 15,870,000 8,417,629 9,146.341 8,888,251 10,235,000 10.061,000 Kronen. 14,594,170 16,366,371 16,041,651 15,843,863 16,262,649 16,206,061 15,74«,480 16,523,903 19,624.447 18,140,353 19,171,746 18,664.834 17,533,846 18,431,351 16,594,490 16,403,513 17,890,806 84.470.000 16,621,118 17,441,330 16,786,978 18,117,000 17,910,000 Kronen. 58,353355 ,59,826,478 61,208,759 61,242,015 60,199,890 50,770,314 49,620.526 45,883,385 43,776,093 49,224,482 46,600,796 50,231,718 49,933,943 4-8,931,763 48,574,671 52,614.771 62.166.462 62,480,000 61,115,280 52.388,798 50,788.988 49,639.000 48,933,000 Kronen. 52,197,089 60,883,105 53,184,768 52,508,491 51,576,765 42,004,760 41,041,235 37,131,014 35,542,598 40.605,578 37,804,496 41,379,782 41,550,646 40,918,385 40,683,711 44,326,891 43,869,887 43,880,000 42,911,796 44,093,809 42,890,261 41,657,000 41,084,000 APPENDIX. 199 Bank Returns. NOEWBGIAN BANK. App. XVI Tears. Metallic Reserve, sign IS. Note CSrculation. Gold. Silver. Total. Of this Eon Obligatioi Total. Uncovered. 1350 - End of December Kronen. Kronen. 8,714,514 Kronen. 8,714,514 Kronen. 1,720,,846 Kronen. 19,729,068 Kronen. 11,014,6.54 1851 - „ — 9,166,330 - n,i(i(;,:!3fl 1 ,816,821 2'),735.3S7 11,669,057 1866 - ,. — 1.3,600,536 13,600,636 9,496,664 30,961,060 17,360,624 1860 - „ — 13,916,216 13,916,216 4,639,673 25,847,040 11,930,824 1861 - „ „ — 12,763,372 12,763,.872 ■1,531,040 25,193,672 12,440,200 18fi6- „ „ — 19,634,672 19,53-1,672 3,446,008 28,624,22-1 8,989,662 1870 - „ — 16,207,628 16,207,.528 4,202,864 28,387,944 12,180,416 1871 - „ — 26,366,852 26,355,862 8,746,660 33,982,176 7,626,324 1S73 - „ — " 29,887,376 29,887,376 9,694,332 88,616,892 8,628,516 1873 - „ 28,231,918 6,1-11,788 34,:i7.'i,73ii 8,868,630 47,178,632 12,804,796 187i - >r ■' 33,560,208 1,116,976 34,676,184 14,098,748 45,869,680 11,193,496 1876 - „ 21,7-13,792 213,7-lt 24,969,636 10,600,392 37,239,632 12,279,996 1876 - „ 32,123,920 171,910 32,296,860 10,104,328 39,668,908 7,373,048 1877 - „ 21,422,153 161,665 21,583,718 6,887,478 36,309,024 14,726,306 1878 - „ 18,943,653 - 18,048,653 6,996,493 30,967,687 12,019,134 1879 - „ 26,097,439 - 26,097,439 8,373,664 32,719,923 6,622,484 1880 - „ 33,482,366 - 33,482,366 10,330,671 38,713,676 6,231,309 1881 - „ Jime 28,797,676 - 28,797,676 9,240,178 40,661,975 11,864,299 „ December 29,913,126 - 29,913,126 8,771,374 37,663,846 7,740,720 1882- „ June - 30,396,209 - 30,396,209 8,669,247 42,421,196 12,024,987 „ December 32,861,096 - 32,861,096 10,461,066 40,578,665 7,717,669 1883 - „ June - 81,423,334 - 31,423,334 10,186,948 42,176,611 10,762,277 „ December 34,871,372 - 34,871,372 11,773,914 40,965,626 6,084,264 1884- „ June - 34,697,376 - 34,697,375 11,296,916 43,821,248 9,223,873 „ December 84,300,306 - 34,300,306 • 11,077,441 38,983,523 4,683,218 1885 - „ June - 30,696,452 - 30,595,452 9,961,527 42,843,006 12,247,664 „ December 28,676,609 - 28,675,609 9,267,831 37,147,466 8,471,847 1S86 • „ June • 27,562,785 " 27,652,785 9,226,113 39,274,840 11,722,055 Bank Returns. DANISH NATIONAL BANK. Years. Metallic Reserve. Note Circulation. Gold. Silver. Total. Total. Uncovered. 183-2 - End of December Kronen. Kronen. 14,612,320 Kronen. 14,612,320 Kronen. (40,000,000) Kronen. 25,387,680 1860 - „ „ - 21,862,000 21,852,000 46,681,000 24,829,000 1865 - „ „ - 19,7.34,000 19,73-1,000 46,644,000 25,910,000 1870 - ») „ — 28,137,000 28,137,000 63,647,000 26,510,000 1871 - » » — 39,403,000 39,403,000 61,886,000 22,482,000 1872 - » « 16,204,000 27,921,000 43,125,000 67,!)08,000 24,383,000 1873 - )) M 28,653,000 21,073,000 49,626,000 75,794,000 26,168,000 187-1 - J> » 3.3,360,000 16,061,000 48,421,000 71,636,000 23,216,000 1875 - „ 38,385,000 8,032,000 46,417,000 70,681,000 24,164,000 1876 - „ 44,970,000 2,166,000 47,126,000 72,318,000 26,192,000 1877.- » J> 33,769,000 3,678,000 37,437,000 63,015,000 26,578,000 1878 - „ 37,667,000 3,820,000 41,487,000 66.414,000 24,927,000 1879 ■ ., 41,988,000 3,623,000 45,611,000 69,399,000 23,788,000 1880 • )> »» 62,487,000 3,010,000 66,497,000 78,588,000 23,091,000 1881 . „ 48,802,000 2,856,000 61,668,000 76,219,000 ■ 23,561,000 1882 - „ June - 44,202,000 3,199,000 47,401,000 71,762,000 24,351,000 „ December 48,214,000 2,924,000 61,138,000 76,213,000 26,076,000 1883 - „ June - 48,058,000 3,079,000 61,137,000 75,634,000 24,397,000 „ December 48,737,000 2,784,000 51,521,000 75,666,000 24,046.000 1881 - „ June - 46,370,003 3,078,000 49,448,000 74,916,000 26,467,000 „ December 46,509,000 3,090,000 49,699,000 72,688,000 23,089,000 1885 - „ June ■ 48,614,000 3,479,000 46,993,000 72,068,000 26,065,000 „ December 46,264,000 3,385,000 49,649,000 73,482,000 23,833,000 200 RO-XAL COMMISSION ON GOLD AND SILVER: App. XVI. Metallic Reserve and Note Circulation op the Treasury and the National Banks in the United States.* 1. Treasury. Years. Returns. Gold, coined and uncoined. Standard Silver Dollars. Other Silver Coins and Bars. Silver, Total. Relation Per Cent, of the Silver to the Whole Supply of Casb. Legal Tender Notes, June 30. Price of 100 Dollars Gold in Notes, January 1, 1876 - - 2 October - Dollars. 56,423,059 Dollars. Dollars. 6,029,367 Dollars. 6,029,367 Per Cent. 0,8 Dollars. 369,772,284 Dollars. 112,75 1877 - - 1 „ - 107,039,629 - 7,425,454 7,425,454 6,5 369,764,333 107,00 1878 - tH 136,038,302 12,166,206 15,777,937 27,933,142 17,0 346,681,016 102,S2 1879 - - 1 January - 112,703,343 17,249,740 16,169,611 32,419,351 32,3 " 100,00 1880 . - 1 November 133,679,849 47,1P6,588 30,820,661 77,977,149 36,8 .. „ 1881 - „ 167,781,909 66,576,378 29,409,262 95,985,040 36,4 ,. » 1882 - „ 148,436,473 92,414,977 30,761,985 123,176,963 46,4 » „ 1883 - jj 167,353,760 116,036,450 31,648,789 147,685,239 48,4 „ „ 1884 - J, 134,670,790 142,926,726 33,992,264 176,918,979 66,8 ., „ 1S85 - " 143,338,689 163,817,312 26,80li,0-2 190,623,414 67,3 " '• * In the returns of the metallic reserve of the Treasury the sums of gold deposited against the issue of gold certificates .are not included. They amounted on November 1st, 1882, to 6,962,280 dollars ; on November 1st, 1883, to 48,869,940 dollars ; on November 1st, 1884, to 85,301,190 dollars ; on November 1st 1886 to 106,465,420 dollars. On the other hand, the certificates in the possession of the national banks are reckoned in their metallic reserve. A preliminary report of the Master of the Mint, Mr. Kimball, of August 9th, 1886, gives the metallic reserve of the Treasury, of the national banks, &c., as follows : — Gold. Silver. In Treasury In national banks In other banks and general circulation . . - Total Dollars. 231,915,699 104,530,687 254,269,840 690,706,126 Dollars. 213,626,810 9,670,567 88,963,969 312,250,346 2. State and National Banks (separately and combined with the Treasury). The banking system of the United States underwent a number of different phases up to the establishment of the national banking system in 1863. Until the discovery of the rich gold fields in California, and the subsequent dis- covery of the silver mines of Nevada, the coin holdings of the banks were comparatively small ; and during the period 1863-78, when inconvertible paper money was in circulation, the coin holdings of the banks were limited to the quantities needed for carrying on the few transactions made in that metal. The following summary statement gives some indications as to the state of things in earlier times : — Dollars. Dollars. 1841 in 784 State banks metallic reserve - 34,813,958 Note circulation 107,290,214 1851 „ 879 - 48,671,048 „ - 156,166,251 ISfil „ 1,601 ■ 87,674,607 „ - 202,006,767 1866 „ 1,644 National banks „ - 9,226,832 ., - 280,253,818 1871 „ 1,767 - 13,352,998 „ - 316,519,117 Treasury metallic reserve Dollars. - 28,685,111 - 40,168,363 • 80,963,858 - 1 66,301,666 - 138,689,176 Bank Returns. National Banks. Banks and Treasury together. Years. Metallic Reserve. Issue of Notes. Metallic Reserve. Issue of Notes. Gold. Silver. Gold. Silver. 2 October Dollars. Dollars. Dollars. 292,200,000 ^ Dollars. Dollars. Dollars. 1876 - - 21,400,000 82,900,000 651,000,000 1877 • 1 „ • - 22,700,000 291,100,000 136,300,000 650,800,000 1878 - 30,700,000 301,900,000 194,700,000 648,600,000 1879 - - 1 January 36,039,201 0,460,667 323,791,674 158,680,355 38,879,808 670,472,690 1880 - - 1 November - 102,831,032 6,495,477 343,834,107 263,633,511 84,472.626 690,516,123 1881 - 107,232,169 7,112,667 360,344,260 294,005,669 103,098,207 707,025,266 1882 - 94,127,324 8,234,739 363,727,747 260,455,297 131,411,701 709,408,783 1883 - 97,670,057 10,247,926 352,013,787 273,179,117 157,033,103 698,694,803 1884 - 117,185,407 8,092,357 833,669,813 277,784,951 185,012,636 680,240,829 1885 - 161,667,121 9,120,802 315,847,168 236,251,499 ■ 199,741.,216 062,528,184 APPENDIX. 201 Comprehensive Table of the Reserve of Gold in Important Banks &c 1872-1886, so far as Returns have been made. , at the end of the Years Banks and Treasuries. Bank of England, Scotch and Irish Note Banks Australian Bank --..-. Netherland Bank - - . - . Belgian National Bank ----- Bank ol France ------ Italian Banks of Issue and Treasury - Austro-Hungarian Bank - . . . Imperial Bank and other Banks of Issue in Sweden Norwegian Bank ------ Danish National Bank ----- Russian State Bank - . . . . 1872. Thousand M. 622,012 47,648 30,303 52i;,'.)iio 78,603 138,808 7,-Ulll Ineonsider- abli'. 17,105 6^7,182 1873. 1S7C. 1877. 1878. i Thousand M. 5!I5,H.3 168,008 67,953 30,246 189,011) 73,173 M.1,055 16,780 23,831 32,122 618,207 Thousand M. .581,1132 Thousand M. 696,241 l(i,'-.,r,u 172,594 94,006 117,726 ■u;.7r,r, 62,324 8no,i>so 939,410 Ti.m 53,805 146,483 136,708 17,873 22,016 2I.S9.1, 16,024 37.680 43,183 639,172 643,469 Thousand M. 7;i 1,093 192,107 109,239 63,232 1,224,320 60,396 1 1.0.414 21,402 2t,772 .';o,.-9i 391,183 Thousand M. i)-«i,861 174,773 85,866 48,960 941,080 61,444 1.34,762 19,710 16,361 37,979 399,436 Thousand M. 719,123 ]67,3U5 75,878 49,064 786,880 63,492 134,749 16,600 14,572 42,375 443,239 Banks and Treasuries. 1879. 1880. 1881. 1882. 1883. 1884. 1885. Bank of England, Scotch and Irish Note Banks Tljousand M. 693,410 Thousand M. 632,672 Thousand M. 654,710 Thousand M. 576,693 Thousand M. 593,017 Thousand M. 567,679 Thousand M. .564,824 Australian Banks - - - - - . 206,136 248,673 224,950 216,761 210,712 28.3,668 263,660 Netherland Bank ----.-. 124,823 96,665 30,869 8,964 39,962 46,150 81,437 Belgian National Bank ------ 57,ii08 58,460 61,872 67,508 57,608 52,740 55,600 Bank of France ---.... 593,280 461,415 624,667 771,685 760,443 801,135 925,932 Swiss Banks of Issue --..-. - - - 26,668 31,621 37,606 39,330 Italian Banks of Issue and Treasury - - . . 64,342 62,093 57,044 61,759 488,844 493,026 396,800 Austro-Hungarian Bank ------ 117,264 130,021 137,451 158,345 165,364 167,644 138,145 Imperial and other Banks of Issue in Sweden 22,566 23,280 22,109 23,.370 23,291 24,091 24,592 Norwegian Bank ------- 19,939 26,046 23,784 25,200 2.5,985 26,126 21,834 Danish National Bank ------ 47,237 59,048 .54,902 54,241 54,829 52,323 52,047 Russian State Bank ------ 483,316 546,077 546,093 545,102 545,102 546,103 645,107 United States Treasury and Banks of Issue - 666,457 1,065,257 1,238,603 1,093,912 1,147,362 1,166,697 1,408,066 In this table we have included only positive statements, such as reached us in direct reports or letters from official sources. Where we had no statements for the close of a year, we have inserted the statement for the date nearest the close; as, for instance, in the case of the United States. If we now make a cautious estimate of the coin holdings of banks not included in the preceding table, we can present the following; summary statement of the probable available holdings of gold in all the reservoirs of civilized countries at the close of each year from 1877 to 1886. Apr. XVI , 1877. 1878. 1879. 1880. 1881. 1882. 1883. 1884. 1886. Million Marks - K«. f. . 2,890 1,0.35,81111 2,860 1,021,600 3,600 l,2.54,(IUft 3,790 1,368,500 3,900 1,397,800 4,070 1,458,100 4,600 1,048,800 4,680 1,677,400 6,040 1,806,500 For the gold holdings of the Imperial Bank of Germany we have made estimates based on the data mentioned above. In regard to the banks of Spain, Portugal, Roumania, Greece, Canada, Cape Colony, &c., for which we have statements for occasional years, we have completed the figures as well as might be. It must therefore be admitted that the totals given present by no means correct figures. On the other band, it must be borne in mind that the mistakes can have but a slight effect on the totals. We give these totals with all possible qualification, yet we are convinced that they do not vary greatly from the facts. It is hardly necessary to say anything as to the importance of continuous statements of this kind. 2. Circulation and Supply op Gold and Silver . Coins over and above the Holdings op Banks, and the Probable Total Monetary Supply op the Preciou.s Metals. We have already seen that in modern times a very con- siderable part of the coin of civilised countries accumulates in the banks or public treasuries, which issue bank notes or paper money, or open a credit to depositors. The greater is the use of such substitutes for coin the less will be the amount of coin actually in circulation. The deno- o 54648. niinations in which coins are struck have much influence on the extent of this substitution ; for the greater the range between the different denominations the less can actual coin he dispensed with. To get some conception of the total monetary supply of a country we must resort, not only to the statements of the coin-holding banks, but also to estimates of the coin in the hands of the community. It need not be said that such estimates are difficult to make and uncertain in their results, especially where there has not been within a com- paratively recent period a recoinage and substitution of Cc 202 110 YAL IJOMMISSION ON GOIJ) ANJ) SILVER \pp. XVI. new for old coins. Notwithstanding the difficulty and uncertainty of the task, it has been attempted from time to time on various methods. It would carry us too far to discuss the methods by which the problem has been ap- proached, and we will give without further ado those estimates of the different countries which, upon the whole, seem to us the most trustworthy. We must, ho\vever, acknowledge the services of the Directors of the Mint of the United States, and of Mr. Ottomar Haupt, who for a number of years have given great attention and mOch labour to this problem. Special credit belongs to the " Histoire Mone'taire de Notre Temps " of the latter gentle- man, published in April of the present year. The various investigations have yielded results which usually agree, and such agreement warrants a certain degree of confidence that the statements which are to follow come as near to the facts as is necessary for our purpose. For brevity's sake we do not give separately the supply of coins in the hands of the community, but give the total coin holdings of the banks and of the community. If it is desired to ascertain the coin in circulation over and above that held by the banks this can readily be done by sub- tracting from the totals the amounts already given for the various banks and treasuries. Enr/land. — A communication made by the Master of the Mint, Mr. Fremantle, in answer to an inquiry by the Go- vernment of the United States, gives the following estimates of the coin in use in Gi^eat Britain and Ireland at the close of 1884 ;— £ Gold ill the banks and in circulation - - 123,309,000 Silver in the banks and in civciilation - - 19,877,000 Notes of the Bank of England and other banks - 40,924,713 Mr. Haupt e.stiraates the money in use in England at the close of 1885 as follows :-^ Per Head of the ^ Population. Gold in the banks - 36,000,000) „, - 76,000,000 > circulation Silver coins - 21,600,000 12s. Bronze coins - 1,600,000 lOd. UncQvcred notes ■ 12,000,000 65. 7rf. £14 1,749,000 Mr. Haupt makes the following estimate for the Nether- lands and their colonies : — Silver coins in the Bank „ „ in circulation in Holland „ ,, in the Colonies - Gold coins and bars in the Bank „ „ in circulation in Holland ,, ,, in the Colonies - Small coin in Holland „ „ in the Colonies - State paper money . - - Uncovered notes . . - Gulden. 96,000,000 56,000,000 190,000,000 48,000,000 15,000,000 3,000,000 9,000,000 18,000,000 10,000,000 50,000,000 Total - 494,000,000 Per head of population there were (at home) 15.76 florins gold, 37.75 florins legal-tender silver, and 15 florins uncovered notes and Government paper. Liatin Union. — The States which form the so-called Latin Union, France, Belgium, Italy, Switzerland, and Greece, must be considered, during the continuance of the Union, as a monetary unit ; since the treaties provide that not only the gold coins, but also the silver 5-franc pieces of each country, shall be accepted in all payments to every country. They therefore circulate indiscriminately in the community at large. The total coinage in the countries of the monetary union was up to July 1885 as follows, the figures being taken from the official reports at the seventh session of the Mint Conference of these countries in 1885 :— Prance. Ita.l.\-. Belgium. Switzerland. Greece. Francs. (;,.301,030,710 2,150,523,030 Francs. 424,46.5,960 238,220,246 Francs. 35,168,085 663,474,660 Francs. 6,000,000 Francs. 12,0011,000 8,651,663,740 662,686,196 598,642,745 5,000,000 12,000,000 4,43.1,139,860 625,466,380 184,621,960 369,681,860 145,180,490 360,497,720 2,500,000 7,978,260 15,462.865 6,060,606,240 644,203,310 495,678,210 10,478,260 16,462,865 237,073,624 84,030,962 170,00(1,000 76,1411.443 33,000,000 12,269,983 18,000,000 4,460,727 10,800,000 6,816,065 In these tables the statement of the Belgian coinage includes 14,646,025 francs of 25-franc and lO-franc pieces, which have been withdrawn by the Belgian Government, while the statement of Italian coinage includes 90,100,040 francs of 80-franc and 40-franc pieces, and 10,91 9i.'-i70 francs of lO-fi-anc pieces, similarly withdrawn. On the other hand, the statement of coinage in France is exclusive of amounts withdrawn. Setting aside subsidiary coins and legal-tender coins withdrawn by the Government, we still find that the APPENDIX. •203 to date coinage of the countries ot the Latin Union u]i amounts to the gijfantic sum of i),S14,217,- IS francs in gold pieces, and 6,120,428,875 francs in silver 5-franc pieces. Now the question, a very important question, arises, how mueh of this enormous coinage is still on hand m the banks or in ordinary circulation, and how much of each kind of coin is in the different countries P The question is one of the utmost importance for the future settlement of the Latin Union and the future Mint policy of the countries composing it. In order to approach it we must consider the countries singly. France haii-for years possessed, and still possesses, the greatest supply of coin. Yet the estimates as to the extent of its supply vary greatly. Three times, in 1868, lS7rf, and 1SS5, the French Govcnuneiit has required about 20,000 public offices to make a statement on a given day of their total holding of gold and silver coin, and of its composition according to the country coined, and according to the date of the French coins. The results were as follows : — App. XVI. 1868 18TS 18S3 Total Sum einniieriili'd. Francs. ■2s),7ll7.2lil) ■22,iU.5,77l> 17,1(18.31 r, (iold Coins. Sih cr Currenc.v. Francs. i'.7!>.TJii Gokl. II7.7J alii ii pel CoTlt. I'^niucs. •2!i.(iis,l"Hl \ Silier. 1I1,878,7I(I i;,or;7,ii:]ii T.U-. 2fi,.in 11,860,430 5,2 1.7 .SS5 •iii.a \ 30,c7 These amounts were divided between French and foreign coins as follows :- Teal's French Gold Coins. Foreign Gold Coins French Silver Currency. Foreign Silver Currency. isns ■ 1S7S - 1885 - Francs. 1 Francs. 27,684,300 (95,4 per cent.) j 1,.343,840 ( 4,o per cent.) 14,7U5,45f) (87,1 I0.fi:)l,130 (89,6 2.173,290 (12,9 1,229,300 (10,4 Francs. . 638,405 (94,0 per cent.) 4,124,945 (08,0 ,. ) S,738,79B (71,2 „ ) Francs. 40,715 ( 6k) per cent.) 1,942,085 (.32,0 „ ) 1,509,090 (28,s „ ) This indicates that the number of silver 6-franc pieces had increased considerably in 1878 as compared with 1868, but had fallen off since 1878- The same was the case in regard to foreign coins, both gold and silver. It will be noticed that the total quantity counted was smallest at the latest date, which may be accounted for by the fact that many offices, in order to avoid the trouble of sorting and counting large quantities of coin, exchanged coins on hand for bank-notes just before the day for which the count was ordered. Other mistakes were doubtless made in the conduct of these inquiries, but hardly exercised a great influence on the general results. M. de Foville believed that these inquiries would enable conclusions to be reached on a method not uncommon in such matters, as to the total circulation of coin in France. In an essay read before the Statistical Society in Paris on October 21, 1885, he put the total supply of coin in France as follows : 4,000,000,000 francs in 20-franc pieces, 600,000,000 in 10-franc pieces, and 2,800,000,000 in silver 5-franc pieces, a total of 7,400,000,000 francs. Adding to these other gold coins— that is, 100, 50, 40, and 5-franc pieces, of which a total of 518,000,000 francs were originally coined— we get a total monetary supply of nearly 8 milliards, a supply such as no other people possesses. Mr. Haupt makes an estimate varying somewhat from this. He pays especial attention to the recorded import and export of the precious metals in France since^l815, and reaches the following results for the close of 1885 :— Per Head of the Population. Gold in the bank „ in circulation Silver currency in the bank - - - Silver currency in circu- lation Silver small coin Bronze „ „ Total - Francs. Francs. 1,157,000,0001 „ 7 .3,300,000,000 f''2» 1,086,000,000 I (., l',400,()00,0()0 J 250,000,000 60,000,000 8,253,000,000 217, Uncovered bank notes - 675,000,000 17,7o Our own o]3inion is that this second estimate puts the supply of gold and silver coins too high, and that, on the other hand, M. de Foville's estimate puts the supply of gold coins and of subsidiary coins too high. We should probably get closer to the truth by putting the French supply of coin at the close of 1885 at about 4,200,000,000 francs in gold and gold coins, about 3,000,000,000 in silver 5-franc pieces, and 300,000,000 in subsidiary coin. In regard to Belgium, it is well known that estimates differing widely were made at the conferences on the con- tinuance of the Latin Union. They differed greatly as to the probable supply of the silver 5-franc pieces in Belgium, and as to the amoi.int of silver 5 franc pieces of Belgian coinage within and without the country. On the basis of what was said at this conference we conclude that the supply of coin in Belgium at the close of 1885 is probably not far from the following : — Gold in the bank - „ in circulation Silver in the bank - in circulation „ and other coin Uncovered notes - Per Head of the l^opulation. Francs. - 69,500,000 1 „ fir p -310,500;000r^-^^^'"'^- - 32,700,0001 - 217,300,000/ small - 48,000,000 - 265,000,000 43 46 In regard to note circulation, it should be remembered that bills of exchange on foreign countries to the amount of ftom 70,000,000 to 80,000,000 francs, convertible into gold at any moment, are constantly held by the National Bank for the redemption of notes. The resumption of specie payments in Italy has led in recent years to considerable changes in its coin circulation, and, indeed, the period of transition is not yet over, rhis explains the great differences between the various esti- mates made from time to time. Before the coin loan of 644,000,000 lire in 1881, it was estimated that the coin supply of Italy amounted to about 209,000,000 lire gold, 171,000,000 lire legal tender silver, and 64,000,000 lire subsidiary silver coin. In a Commission Report of June 3, 1855, Deputy Simonelli estimated the monetary supply of the precious metals in Italy at that time as follows ; — Gold. Silver Currency. Silver, Small Coin. In the State coffers - „ banks - „ hands ol' pri- vate people. Mill. Lire. 224,4 280,8 60,0 Mill. Lire- B,9 33,1 50,0 Mill. Lire. 26,1 14,- 139,2 Total - .">fi5.3 ' 89,0 3 70,0 Cc 2 204 ROYAL COMMISSION ON GOLD AND SILVER: App. XVI. Pqj ^ije pioge of 1885 the best informed Italian statisli- -~~- cians made the following estimates ; — Gold in the State Treasury - „ in the banks - „ in circulation - Sih'er currency in the State Treasury „ in the banks - ,, circulation . - . „ small coin Bronze „ - - " State paper-money - Uncovered bank notes Lire. 219,000,000 280,000,000 75,000,000 80,000,000 44,000,000 50,000,000 171,000,000 75,000,000 994,000,000 238,000,000 612,000,000 Included in this table are 18,000,000 lire of old and foreign gold coins, and 74,000,000 lire of old silver coins which had been withdrawn. Per head of population there were at the close of 1885 18.50 lire gold, 3.30 lire legal tender silver, and 5.70 lire of subsidiary silver coin . M. Ferraris put the monetary supply of the precious metals in Italy at the end of June 1886 at the following figures: — Francs M. Gold (at the highest) - 600,000,000 (per head about 1 7) Five-franc pieces - 110,000,000 ( „ „ 3) Silver small coin - 170,000,000 ( „ „ 5) Bronze coins - - 76,000,000 Bourbon piastres and others - - 27,000,000 In regard to Switzerland, also, estimates vary greatly, especially in the matter of silver 6-franc pieces. Former estimates were apt to put the supply of this sort of coin in Switzerland at no more than 40,000,000 francs, while later estimates put it as high as 150,000,000 francs. These estimates must have been in the mind of the Swiss dele- gate to the Paris Conference of 1885, who said, at the llth Session of the Conference, that inquiries made in August 1885 indicated that nearly half (49.5 per cent.) of the 5-frano pieces circulating in Switzerland consisted of Italian pieces, and that this, on a total circulation of at least 100,000,000 francs, would indicate that the Itahan pieces amounted to 50,000,000 francs. If we include the coin holdings of the Swiss banks of issue, which, as stated above, amounted at the close of 1885 to 49,163,000 francs of gold and 20,438,000 francs of silver, we believe that tlie probable monetary supply of Switzerland may be cautiously stated for the close of 1885 as follows ; — Gold - - 90,000,000 per head of about 31,o ' Silver currencv 70,000,000 „ ,, 24,i Small coins '- 20,000,000 „ „ 6,, Notes uncovered by metal - 54,510,000 „ „ 18,8" Austro- Hungary. — So far as Austro-Hungary is con- cerned, we need add no sum of importance to the coin holdings of the Austro- Hungarian Bank, which were, at the close of 1885, 69,080,000 florins of gold and 129,720,000 florins of silver. The circulation of irredeemable paper money since 1848 and the discontinuance of the coinage of silver, which has been maintained for a number of years, have driven abroad all but the subsidiary coins. We probably get close to the truth by putting the total monetary supply at the close of 1885 at about 80,000,000 florins of gold and about 150,000,000 florins of silver, there being at the same time 48,000,000 florins of sub- sidiary coin, 165,000,000 florins of bank notes, and 338,000,000 florins of Government paper money. Germany. — An estimate for the year 1870, whose correctness has not been doubted, and which of course does not include Alsace-Lorraine, puts the monetary supply as follows : — M. Inland gold coins about - 91,000,000 Silver currency - - 1,500,000,000 Small coins - - 85,000,000 Foreign coins - - 40,000,000 Hamburg bank-fonds - 36,000,000 per head. M. Total - 1,762,000,000 ca. 45 Inland paper-money - 184,000,0001 Uncovered notes 369,000,000/ Grand total - 2,295,000,000 14 59 lation and either recoined or melted into bullion. There were withdrawn of old silver coins 1,080,486,138 marks, of which 530,334,687 marks were in thaler pieces. From the silver obtained by melting down these coins there were taken up to the close of 1885, 222,lMo,743 kilograms fine for new imperial silver coins, and 3,552,448 kilograms were sold. The remainder (94,468 kilograms at the close of 1884) is still in the Government's possession. The total coinage of the German Empire, exclusive of coins withdrawn in the meanwhile, has been, up to the close of 1885, 1,928,890,830 marks in gold coins, 444,491,484 marks in silver coins, and 44,842,462 marks in nickel and copper coins. The new silver coins and the other subsidiary coins struck since 1873, barring an uncoined portion of 20- pfennig pieces and an insignificant loss by accident are still in circulation ; but, on the other hand, considerable sums of the gold coins have disa,ppeared from circulation. There have disappeared, in the first place, 120,000,000 marks in double crowns, which are absorbed in the war treasury at Spaudan. This sum is certain, but the quan- tity melted down for use in the arts or exported to foreign countries is quite uncertain. A part of the quantity ex- ported, especially that which is held by foreign banks in its original form, is not permanently withdrawn from circu- lation in Germany, since a favourable rate of exchange will doubtless bring it back to Germany sooner or later. As the rate of excliange in recent years has been generally in favour of Germany, it is probable that the only coin which has been remelted at foreign Mints or has been used in the arts constitutes a loss to Germany's possible supply of gold. Needless to say, we must add to this supply tlie gold held by the Imperial Bank in bars and in foreign coins. Mr. Haupt ascertained that at the close of 1885 there had been undoubtedly recoined at foreign Mints German gold coins to the amount of 161,400,000 marks. He estimates that about 110,000,000 marks of these coins had been melted for use in the arts. This is a mere guess, but as we know no reason for believing the amount to b'J larger or smaller, we accept it. The sum of gold bars and of foreign gold coin held by the Imperial Bank at the close of 1 885 was, reckoning the pound-fine at 1,392 marks, 193,706,605 marks. We have already published the statement which follon'S of the supply of thaler pieces. We still consider that statement to be proximately correct, and we reproduce it since it is connected with a point of great practical import- ance for Germany. At the beginning of the reform of the German coinage it was calculated that there could have been in circulation 367,746,038 thaler pieces, that is, 1,103,238,114 marks. When the one and two florin pieces were entirely with- drawn, it was found that about 21 per cent, of the'original coinage had disappeared. If we assume the same propor- tion for the thaler pieces, there would have been present in the year 1870 about 854,000,000 marks of those coins. Up to May 1879, when the withdrawals of thalers ceased, there had been drawn in 630,334,687 marks, so that there are probably still in circulation 323,665,000 marks. All the Austrian th'alers still in existence have made their way to Germany. Of these, 31,060,321 pieces had been coined, which would leave in circulation, making the same deduc- tion that was made before, 73,600,000 marks, which should be added as part of the existing supply. The total pro- bable supply in Germany of thalers which are still full legal tender may therefore be put at nearly 400,000,000 marks. The supply is generally put at 450,000,000 marks, in order to prevent any charge of intentionally understating it. Government notes were originally issued to the amount of 174,120,130 marks. The quantity has decreased in accordance with the provisions of law, and amounted in March 1886 to 137,500,000 marks. We may therefore make the following statement of the extent and composition of the money in circulation and of the precious metals in Germany at the close of 1885 : By the close of 1880 all older German coins, barring a remnant of thaler prices, had been withdrawn from cirou- Imperial gold coin (besides 120 million marks in war treasure). Gold in bars and foreign coin in the Imperial Bank. Thalers, German and Austrian, at the highest. Imperial silver coins Nickel and copper coins Total in metallic money Imperial bank notes - - . Uncovered notes - - . Grand total Marks. 1,550,000,000 194,000,000 450,000,000 442,300,000 40,000,000 2,676,000,000 138,000,000 361,000,000 3,175,000,000 APPENDIX. 205 The deposits in the banks which are to be considered equivalent to a note circulation would give an addition of 300,000,000 marks to this total. Per head of population Germany .possessed for a total population of 46,840,000, 37.2 marks of gold, 10 marks of legal tender silver and subsidiary coin, 10.7 marks of credit money — that is, a circulating medium of all kinds jicr head of population of about 68 marks (the deposits not being reckoned) as against 58. .5 marks in the year 1870. Scandinavian Countries. — Since the treaty of 1873 Sweden, Norway, and Denmark have a close monetary union. The coins of each country being legal tender in the other countries, tliey are to be considered as one country so far as the supply and circulation of money are concerned. As appears from the tables printed above, the three countries coined from 1873 to ihe close of 1886, 94,462,925 crowns of gold and 39.438,572 crowns of silver. This gives for a population of 8,400,000, 11.2 crowns of gold per head and 4.7 crowns of silver per head. The figure for silver may be considered accurate, since tlie silver is a sub- sidiary coin whose nominal value exceeds its intrinsic value by more than 30 per cent., and which is therefore neither melted down nor e.Kported. The case is different vnth ihe gold coins, in i-egard to which we know from the reports of foreign Mints and from other sources that considerable sums have been exported and melted. On the other hand, the Scandinavian public banks hold large sums of gold in bars^nd in foreign coin as a reserve for their note circu- lation. Moreover, the Bank of Nnrway, over and above its domestic holdings of gold, has a not inconsiderable supply of gold on deposit at foreign banks and imme- diately available. The money in circulation in the three countries at the close of 1885 may be estimated as follows : — Denmark. Sweden. Ifoiway. Gold in the bank s - Kronen. 46,260,000 Kronen. 21,630,000 Kronen. 19,410,000 circulation - 3,000,000 11,000,000 1,000,000 Silver coins - 18,.500,000 15,500,000 5,000,000 Bronze coins - 700,000 900,000 300,000 ■Uncovered notes 23,830,000 64,140,000 17,740,000 Total 92,290,000 113,170,000 43,450,000 inquiries made in these countries. The experience of the Scandinavians jn-oves clearly that where a firmly organised banking system has possessed complete confidence for a considerable period of time, and where the copulation has become used to small bank notes, these latter form the chief circulating median), while gold coins, notwithstand- ing the gold standard, make their appearance to a very slight extent in general trade and accumulate in the banks. Russia. — Here the existence of irredeemable paper money leads us to make our estimate of the monetary supply in much the same way as in Austro-Hungary. The stated quantity held by the Bank of Russia and the quan- tity of subsidiary coin are to be supplemented by some small amount which must be guessed. Although the irredeemable paper money has existed for many years, and has driven all coin of full i\'eight out of circulation, a larger or smaller part of the coin formerly in circulation is still held by the people. This conclusion is based on the common experience that when the resumption of specie paynient takes place in a civilized country, a great number of coins make their appearance without anyone's knowing exactly whence they come. Let us add to the supply of gold held by the Government bank as given above, 10,000,000 roubles of gold coin and about the same amount of silver legal tender coins ; let us add also 80,000,000 or 90,000,000 roubles in silver and copper subsidiary coin, and we get (apart from the so-called latent reserve) a statement which is not too low of the present supply of coin in Russia. The paper money issued up to the close of 1885 amounted to about 907,000,000 roubles. On the other hand, 244,000,000 roubles in gold were held by the banks. The balance sheet of the Bank of Russia for July 1, 1886, stated 716,433,349 roubles of credit notes to be in circulation, while the coin reserve was 171,472,496 roubles, of which 170,346,091 roubles were gold. In addition, the banli held coin for safe keeping to the amount of 13,598,729 roubles. The premium on the paper is subject to great fluctuations, but experience has shown that it does not depend upon changes in the total amount of paper issued. We have received the following estimate of the coin in circulation in Finland at the close of 1886 : — App. XVI. Gold coins in the bank, about - „ ,, ,, circulation Silver „ „ the bank „ „ ,, circulation Copper coins . . . Finland Marks, - 17,25(1,000 - 4,750,000 - 6,500,000 - 6,500,000 900,000 If we consider the gold which is kept abroad, a part of the reserve for the Norwegian bank notes, the amount of uncovered notes becomes no more than 8,472,000 crowns. These estimates diiler from those last presented by Mr. Haupt. We put the amount of gold coins in active circulation in Sweden and Norway at a much lower figure than that gentleman. Our conclusion rests on numerous United States. — We have already stated in the first division of the present part the supply of coin in the Trea- sury and in the banks. It remains only to give the sums which are in the hands of the public at large, and bv add- ing them to the quantity in the Treasury and in the banks, to ascertain the total amount of money in use in that im- portant country. It was estimated that there were iu the hands of t!ie public : — 1st January 1879. 1st November 1882. 1st November 1S83. 1st November 188-1. 1st November 1885. Gold Dollars. 119,629,771 Dollars. Dollars. 3!ix.791,137 Diillavs. 307,826,918 Dolhirs. 251,-t7(;.2ss Silver Clfi'M.Kir, 77,332,723 84,768,767 90,722,903 107.914,611 Notes 459,097,11.-.] .S18.S2S,2SS 523,12'l.,12l 492,736,833 470.401,878 Total 046,420,717 913,001,970 910,684,025 891,285,663 S29,792,777 Add the amounts in the Treasury and banks, and we get as the total supply and circulation of money :— 1st January 1879. Ist November 1882. 1st November 1883. ) st November 1884. 1st November 1,SS5. Gold Silver Notes Dollars. 278,310,126 106,673,803 670,472,690 Dollars. 647,356,262 208,744,424 709,408.763 Dollars. 581,970,254 242,701,932 098,694,803 Dollars. 585.611,872 276,735,439 680,240,829 Dollars. 5S6.7il7.787 307.658.837 062,528,184 Total 1,055,356,619 1,465,509,449 1,52,3,366,989 1,641,588,140 1,556,914,798 20(5 ROYAL COMMISSION OX GOLD AND SILVER: Aip. XVI. As this table shows, the supply of precious metals in the United Slates has increased in the space of not quite seven years from the 1st of January 1879 to the 1st of November 1885 by 308,418,000 dollars of gold and by 201,085,000 dollars of silver. Attempts have occasionally been made to get statements of the money in circulation in countries Other than those mentioned above. But we present none of them, consider- ing them too uncertain. We content ourselves with pre- senting a collective statement. Some such statement has to be made, if we wish to get an expression in figures on the general condition of the medium of exchange and the probable future of the gold and silver standards. It is perfectly true that no statistics are better than false statistics; but we have here to deal, not with false statistics, but with estimates and compilations by which, though with wide limits of error, we try to get near the truth, and which are no more open to the charge of over- statement than to that of under-statement. What we said before as to the estimates of the production of the precious metals holds good for these estimates also. If good reasons are presented for thinking the balance of probability to be diffeivnt, those who prepared the tables are more than willing to undertake a modification. Nothing lies further from their intention than to uphold preconceived or pre- judiced estimates. AVe have said that we will give a collective estimate for all the countries not especially mentioned above. This proceeding has the advantage that too high an estimate for one of these countries is likely to be offset by too low an estimate in another, and that we dispense with much empty guess svork. In any case these supplementary amounts are insignificant in comparison with the totals arrived at. We therefore conclude the present part with a statement giving the probable monetary supply of the precious metals in civilized countries at the close of the year 1885. The legal tender and subsidiary silver are treated as one. But the value of the silver coins we reckon on a plan different from that followed elsewhere in this work. We calculate, not their intrinsic value, but that assigned to them by law, that is, the value which is given in the bank statements and which obtains in ordinary circulation. Estimate of the Monetary Supply of Precious Metals at the end of 1885. Countries. Gold. Silver. Gold and Silver. Million M. Relation l)er cent. Million M. Eolation per cent. Million M. Relation per cent. fJreat Britain . - - - 2,220 Ifi.ci 432 5,51 2,625 12.„ Bi'itish Colonips (without Indin) - 6S0 5,0'J 66 0,84 74« 3,58 Tlie Netlierlands 80 n,m 260 3.43 .349 1.65 France, Italy, BelKimn, and Switzer- land ----- ■l,lfl5 31,35 .3.200 iO.m 7,30.-^ 34.87 Austria-Hungary 160 1,20 370 i-:i Kil 2,50 Germany .... 1,74.1 in,o, x;ii ll:i7 i 2,il.SG 12.43 Seftndinavian Lau'ls - 115 n,si! !2 0.:,, ' 137 0,74 Russia . - - . . 770 n.To j is:i 3..,T 1,0,50 4,S5 TTnitfd States .... 2,4e4 18,4, 1 .31)2 10.47 .3,756 17.71 Otli.-r Countries in Europe and AuiiM'lea - - - . »3(l 7,00 1,000 12.7; 1,9,30 n,,3 Tflal i;i.Sht ion„„ 7,813 100.„„ 21,2117 100,00 APPENDIX. 207 VI.-TilE RATES OF DISCOUNT AND OF EXCHANGE. A]-i-. XVI. As oi.r Materials arc meant mainly for the use of men of of their fluctuations may be disnens.,! with busmess. a deta,led d.scussjon oi the nature of the rate themselves give sufficient^nfo X" of discount and the rate of exchange, |and oi: the meaning '"iniauun. The tables 1. Flictuations in Discount at certain Chiei- Places during 1851-1886. Bank of Ell ^[anil. Bank of I'lanee. Geniian Imperial and Hamburg Private 1 YlIU!.. Prussian Bank. Discount. Vienna Exchange. Lowest.' Highest Avfi-usc. Lowest. 4 Highest AveniRe. Lowest. Highest Average. Lowe.st. lii^'iest Averij^o. Lowest. ilif^licst A\ei-;t^:i'.. IWl 3 o 3,00 4 i 4 4,00 14 5 2.75 4 1 4 1 4,00 is:.2 - •'.*■ 2.W 3 •1 3,17 4 4 4,00 ^i 6 3,25 4 4 4 .Off 1863 -4 3 3,30 3 4 3,23 4 5 4,25 ij 6 3,.50 4 4 ■ i'j 18W 5 j oi 5,12 4 3 4^30 4 5 4™ li 44 2,50 4 4 4,00 1S53 Oi a 4,75 4 « 4,« 4 '14 4,10 n 6J 3,75 4 4 4,00 1836 45 GJ 5,75 3 6 5.5i 4 6 4,94 44 6,25 4 3 4,27 1837 oi llj 6,75 = a 6,15 5 74 5,76 31 10 6,50 3 5 5,00 1S3S ■24 3 3.25 3 3 3.TU 4 64 4,29 1 24 1,75 5 5 5,00 1859 Si 1 i 2.75 3 4 3,45 4 5 4,20 14 5 2,00 5 3 5,00 1860 -i" j 1 1 4,25 34 4.; 3,63 4 4 4,00 1 3 1.75 " 5 34 5,13 IStil 3 ! 7i 1 3,i5 44 7 5,52 4 4 4,00 15 44 2.sn 34 54 5,50 186-2 - 3 2,:o 34 s 3,77 4 4 4,00 ij- 44 3,00 5 54 5,05 1863 Si 74 4-50 34 7 4,6, 4 44 4,03 2 51 3.19 5 5 5,00 istu 6 9 7,30 44 8 6,50 44 7 5,31 n 6i 4.1J 6 5 5,00 18IJ.3 3i 7 i.rs 3 5 3,72 4 7 4,96 ii 7 3,30 5 6 5;00 1866 Si 10 7,00 3 5 3,67 i !t (i,2l 3 84 4,69 4 3 4,.ji 1867 •2 34 2.;,| 24 3 2,71 4 4 4,00 14 4 2,12 4 4 4„o 1868 2 3 2.23 2->- 24 2,50 4 4 4,00 14 3- 2,12 4 4 4,00 1869 2i 44 3.:;5 24 24 2,50 4 3 4:2.|. 24 4J 3.87 4 5 4,31 1870 2J 5 3, 1 J 24 a 3,U9 4 8 4,90 . 24 8 3,56 5 u 5,43 1871 " 44 2.,: 5 5,71 4 5 4,10 2i 44 3,06 3 64 5,19 1S72 3 65 4,13 3 6 5,15 4 5 4,29 24 •54 3.44 6 6 5,r("i 1873 Si 8J 4,75 5 7 5,15 4 7 4,95 .3 7 4,MI 6 6 5,02 1.S71 n 6 3,75 4 4-.; 4,30 4 6 4,33 ii 6 3,53 44 5 4,87 1875 2 44 3,25 4, 1. 4,00 4 6 4,71 il 51 4,03 4^ 5 4,53 1876 2 4S 2,C2 3 i 3,40 34 6 4,16 2 64 3.25 44 6 4,54 1877 2 ■t; 2,67 2 3 2,28 4 54 4,42 24 5 3,47 44 44 4,50 1878 2 5-5 3,75 2 3 2,18 4 f 5 4,31 24 45 3,49 44 44 4,50 1879 2 44 2,37 2 3 2,58 3 44 3,70 « 44 2,83 4 44 4.17 1880 24 3 2,75 .-,j. 34 3,81 4 54 4,2, 14 54 3,18 4 4 4,00 1881 2J 3 3,50 34 5 3,6.1 4 54 4,42 34 64 3,81 4 4 4,00 1882 3 5iJ 4,12 34 3 3,80 4 6 4,54 24 5 3,98 4 5 4.20 1883 3 4i 3,56 3 34 3,07 4 5 4,05 24 5 3,22 4 5 4,11 1881 2 5 2,95 3 3 8,00 4 4 4,00 2 44 2,97 4 4 4.00 1883 2 5 3rf)o 3 3 3,00 4 5 4,12 2 44 2,66 4 4 4,00 The Discount calculated for Periods at the above was as follows :- Periods. Bank of England. Bank of France. German Imperial and Prussian Bank. Hamburg Private Biscount. Vienna. 1851-1860 - 1861-1865 - 1866-1870 - 1871-1875 - 1876-1880 - 1881-1885 - 4,12 4,90 3.63 3,75 2,S7 3,13 4,10 4,83 3,07 4,80 2.65 o-ii 4,39 4.17 4,67 4,50 4,17 4,23 3,.io 3,30 3,27 3,77 3,2-1 3,37 4,« 5,11 4,54 5,16 4.31 4,06 :().s ROYAL COMMISSION ON GOLD AND SILVER: App. XVI. The highest and lowest rates of discount in the 35 years, from 1851 to 1885, were as follows :— Per cent. Per cent. Bank of England - - 10 and 2 Bank of France - - - 9 „ 2 Prussian and Imperial Bank - 9 „ 3 Hamburg, private - - 10 ,, 1 Vienna - - - - 6^ ,, 4 In Paris, London, and Berlin, the rate of discount a other banks, and with private firms, was generally some- what lower. As regards the number of changes which the rate of dis- count underwent in each year from 1851 to 1885 in Lon- don, Paris, Berlin, and Vienna, the following table gives information : — In the Years. Bank of England. Bank of France. Prussian Bank. Vienna. In the Years. Bank of England. Bank of France. Grerman Imperial and Prussian Bank Vienna. Number of Changes. Number of Changes. 1S51 None None None None 1869 7 None 1 1 1852 2 1 None None 1870 10 4 5 1 1863 « 1 1 None ISS-l 2 . 2 1 None 1871 - 10 2 1 4 1856 7 2 1 None 1872 14 1 1 2 1866 8 2 4 1 1873 - 24 4 6 1 1857 9 8 7 None 1874 - 13 1 4 1 1868 6 4, 5 None 1875 12 None 5 1 1869 6 2 2 None 1876 5 1 6 1 1860 - 11 1 None 1 1877 - 7 1 7 None 1861 1862 1863 11 5 12 7 4 8 None None 2 None 1 None 1878 1879 1880 - 10 5 2 1 2 2 3 6 5 None 1 None 1864 15 11 5 None 1881 6 2 3 None 1865 - 16 6 5 None 1882 6 3 6 1 1866 - M 7 10 1 1883 6 1 1 2 1867 - , - 3 1 None None 1884 7 None None None 1868 2 None None None 1885 7 None 3 None Finally, we present a comparative statement of the the well-known annual " Commercial History and Review monthly rate of discount at several important points for " of the London Economist." the isv/o years 1869 and 1885. The figures are taken from London. Bank Disc. January February March - April - May - June - .July - August September October November December Average 1886. January February March - April - May - June - July - August September October November December Average Per cent. S 3 3 4 4 a 34 3 24 24 Pri- vate Disc. Per cent. 2J 21 3 3i 3i 24 2f 3,00 44 31 34 2J 1 14 If li Paris. Bank Disc. Per cent. 24 24 24 24 24 24 24 24 24 24 24 24 2,60 3 3 3 3 3 3 3 8 3 3 3 3 3.00 Pri- vate Disc. Bank Disc. Per cent. 14 Ij 14 14 14 2 24 24 24 24 2,25 3i 2f 2J 2i 2f 2i 24 2i 24 21 2,4fi Vienna. I'lt cent. 4 4 4 4 4 4 4 6 6 5 5 4,37 Pri- vate Disc. Bank Disc. Per cent. 4 4 4 4 4 4 5 7 6 5 4,50 4 34 84 3f 3i 3i 34 n 34 34 34 31 3,18 Berlin. Pri- vate Disc. Frankfurt. Bank Disc. Pri- vate Disc. Amsterdam. Bank Disc. Pri- vate Disc. Brus.sels. Bank Disc. Pri- vate Disc. Hamburg. Bank Disc. Per cent. 4 Pin- cent. 24 24 24 24 24 4 3 3 4 44 4} 3.25 3| 34 34 34 4 24 2i 2J 24 34 n Pet cent. 24 24 24 24 24 24 3 3 3 S 4 4 1 Per cent. IJ If li If li 3 3 3 3 4 34 2,50 Si 34 21 34 4 2f 3 24 24 34 21 Per cent. 24 Per cent. 24 24 24 24 24 24 24 3 24 34 34 34 34 34 34 34 34 4 31 6 6 6 6 3,50 8,50 3 2i 8 24 3 2i 3 3 3 21 24 2i 24 24 24 2 24 2 24 24 24 24 24 24 2,71 2,39 Per cent. 24 24 24 24 24 24 24 24 24 24 24 24 2,50 4 4 ' 3 3 Per cent. 24 24 24 24 24 2i 24 24 24 24 2)50 31 34 2f 24 24 •2i 21 2i 2| 34 2,so Per cent. Pri- vate Disc. St. Peters- burg. Bank Disc. Per cent. 15 li li li li 44 4 24 4 4 4 34 2,75 3i Si 24 2i 24 24 3 2f 24 2.82 Per cent. Pri- vate Disc. Per cent. 64 64 64 64 7 6 5 44 64 6 7 6,ia 6 6 6 6 6 6 6 6 6 6 6 6 6,00 APPENDIX. 2. Exchange on London, 1851-86. 209 App. XVI Berlin.' Paris.t St. Petersburg. Vienna.} New York.§ 3 months. 3 months. S months. 3 months. BO days sight. . Francs per C. Pence per rouble. Gulden per £ and £10. § i Highest . Lowest Average ■ Highest - Lowest Average . Higlicst . Lowest. Averag, . Highest . Lowest Average . Highes . Lowest Average. 1851 6>23 6,19i 0,2oi 33,05 24.77* 24.„oi 3815 37* 37„„ 13,,o 11,32 13,14 1852 e^si 6,20i 6,23f 25,32* 24,,..o 25,i5l Sfli'ir 37*1 3^,29 12.29 10,..5 11,6.3 1853 6.221 6,i6i e.ioi 21.90 21.70 21.7jJ 391 38 38,68 11,19 10,38 10,63 _ 1S54 6.17 O.isl 6,,5i 24.82* 2-1.02* 21.7. §- 38i>, 33* 36.37 14,00 11,12 12,31 _ 1856 6,20 6,ui 6.17i aiffii 24,77 i 24,B..J 36J sn.,% 36,07 12,28 10,51 11,62 -.. _ 1866 e.22i 6.,6i 6,20s 25,021 24 so 24,9ii 39t*. 37r',r 38,23 10,26 10,02 10.10 1857 6,1,1 6,1,1 6,isl 2-1,87* 24.70 24,8„t 38A 31* 37,24 10.34 10,07 10,13 _ 1868 6,21 6.lsi e,iol 26,00 24,82* 24,9oJ 3611 35* 35,98 10.22 9.51 10,05 __ 1859 6.1 6.U e.i,f 2-1.95 24,92* 24,931 36H 33i',; 36.24 143,00 101.10 122,29 ,, 1860 6,13 G.17i G,ni 25,07* 24.82* 24,8st 36* 34*i 35,68 111,00 126,„, 1.32,50 110 101* 108,5, 1861 6,2li 6.i8i 6,20 25,17 21,85 25,ooi S6 33J 31,27 153,40 137,35 111.78 llOf 106 107,58 1862 6,22i 6.joi 6.2ii 23,12* 21,92* 26,03* 35** 33 fV 34,68 138,80 114.80 128,28 147 nil 125,50 1863 e,2,i 6.13i C,2„i 23.20 24,85 24.9,J S7*i 35 36,61 120,75 110.60 113,50 187 140 160,29 1864, 6,2l4 6.18i 6,20i 24,92* 24,67* 24 7,1 84J 30A 32,55 120,70 113.60 115.9, 273 172 223,25 ISGo 6,2,i 6,20t 6,22i 2-1,97* 21,77* 24.89f 31*5 31* 31,43 113,05 103.80 109,00 226 151* 107,35 1866 6,al 6.175- 6,21 23.16 24.70 24,88? 32* 25*S 29,73 130,70 101.70 120,38 166 136 161,82 1867 6,2.i 6.208 6,2.,J 25,21* 23,u 25„6i 33* 31* 33,51 131.70 120,30 126,98 110* 108 109,3, 1868 6^i 6,22l S,2.ll 25,21 26,14 25,16* 33A 32/17 32,89 119.70 113,60 116,50 no* 108i 109,67 1869 6.241 6,23 6,23* 25,28 26,12* 25,10* 32i°j 29* 30.58 126,90 121,10 123,75 110* 1071 109,01 1870 6,2.i 6,18 e.^i 25,20 2.5,12 25,18* 31 281 29,73 121,50 119,90 124,04 109* 108* 109,22 1871 6.23f 6,19i 6,2i4 26,10 26,25 26.65I 32*1 31 32.00 126,10 116,90 121,42 llOf 108* 109,14 1872 e.2iJ 6,20 6,2.i 23,07* 26.22 26,„i 33 32t\ 32,73 113,80 106,90 110,53 110 108f 109„o 1S73 6.2li 6,19 6,20^ 25.51 25.27* 23,64l 32*1 32* 32.45 113,85 109,00 111«5 109* 106* 108,13 1874 G,ffl,^ 6,2if 6,22! 25,23 25,13 26.i,f 33i 321} 33,25 113.75 109,25 111,01 1.88* 4,84 4.85* 1376 20,« 20,15 20,3„i 25.20 25,08* 25.i5i 331 31 H 32,73 ■ 113,80 111,«, 111,32 1,88 4,79 4.3.i 1876 20.1, 20,21 20,35* 23.2. 25,08* 25,16 31* 2811 30,90 127,45 114.30 121,35 4,88* 1.82 imi 1877 20,iii 20,2si 20,35;- 25,19 25,06* 25,ii5 291 23A 26,96 128,90 117.20 122,23 4,88 1,81 4.84* 1878 20,3ii 20,21 20.2;;- 25,2, 25,08* 23,165 26f 22r:7 24,40 122,60 111,70 117,89 1,87 1.80* 1.83* 1879 20,„ 20,2;,i 20,3.2! 25,30 25 12* 26,2il 25* 23* 24,30 117,-0 115.85 116,63 1,87? 4.80 4.33! 1880 20,3oi 20,20 20,,,;- 25,35 26„2* 26,25* 26*S 24^T 26,01 119.15 117,20 117.34 4,80 4,78* 4.32* 1881 20.,,^ 20,16 20,291 25,31* 25,11* 25,24f 20 24A 25,19 118,80 116,90 117.90 4,83*' 4.76 1.80J 1882 20,32* 20,i5i 20,25* 23,27* 23,12 26,2„| 24A 28}* 24,10 120.35 118,50 119,63 1,80! 4,79* 4,33i 1883 20,32i 20,2s^ 20.29i 23,32 25.,,* 25,24 24A 23? 23,60 121,10 119,65 120,07 1,84* 4,81 4,82* 18SJ 20„2 20.H 20,3iJ 25,32* 25,u* 2.5,21* 25^j 23ii 24,31 123,30 121,30 121,98 1.87? 4,30 4,83* 1885 20,„i 20,22 20,29i 23,3,* 23,23* 25,23* 26A 23*1 21,16 126,75 123,70 126,01 4.80* 4,33 484'} * Herlin.—Yrom the year 1S7.3 the rate of exchange is quoted in marks. t Pa?' is.— Prom the year 1807 the quotations are for " short sight " exchange. In consequence of the Pranco-German War, from September 1870 to May 1871, no rate of exchange was published. t Vienna.— Yvom the year 1869 the rate ot exchange is for Wl. sterling, and from 1881 the quotations are for "short sight." §JVeMJ FoWt.— To the "end of 1873 the rate on London was quoted at so much per cent, premium, on the basis ot a fixed relation of 14 shillings sterUng for the dollar, or 441 cents for 12.— By Act of Congress of the Srd of March 1873, the old sterling calculation was abolished, and ceased to be m force from January 2, 1874 ; ooiitraots based on it are from that date null and void. Since then the rate ot exchange on London has been calculated in dollars for 11. sterling at the regular rate of ll. sterling=4S dollars. After the suspension of the redemption ot paper money at the time of the Civil War in 1861, this caused a loss as against metallic money, which amounted in January 1862 to 6 per cent., in March 1862, IJ to 2* per cent., then by degrees it rose considerably, and reached the maximum of 185 per cent, on July 11, 1864. Prom the year 1878 paper money has stood at par with gold money. There is no subject in statistics which admits of so exact treatment as the rate of exchange, The balance of pay- ments in a country is indicated beyond doubt by the rates of exchange. If a country has larger payments to make abroad than it has to receive (taking into account all payments due at the time, so that it is necessary to con- sider not the excess of imports alone, the payments of interests alone, or any single obligation), then the equili- brium must be established by a remittance of coin. But a remittance of coin will take place only if bills on foreign countries are dear. In consequence of the arbitrage trans- actions the various rates of exchange of any one place o 54648. form a whole, and move together. It is unfortunate that these transactions, whose influence upon the international movement of money, and thereby upon the general com- mercial interests of the countries concerned, is so impor- tant and beneficial, are often misunderstood, and are fettered by taxes which are the result of a misconception of their nature and effect. In former times the possible variation in the rate of exchange (speaking, of course, only of countries having a fixed gold standard) was much greater than it is now. At present the expense and the loss of time in making remit- tances of gold are reduced to a minimum. The gold point Dd 210 EOYAL COMMISSION ON GOLD AND SILVER: App. XVI. — *^^^ i^ ^° ^^7' *^8 point at which gold is likely to be shipped — is as follows for the important rates of exchange : — Par. Remission of Gold. Import of Gold. Berlin rate in London Marks 20,« 20,33 20,52 Paris „ „ Prancs 26,225 26,125 25,325 A.msterdam „ „ Plorins 12,11 12,02 12,17 New Tork „■ „ Dollars 4,867 4,827 4,90 Paris rate in Berlin - Marks 81,00 83,56 81,37 This table refers, of course, only to the rates on sight bills or bills falling due at very short dates. For other bills the date for which they are drawn and the rate of discount in the place on which they are drawn must of course be taken into account. The average rates of exchange given in our tables have been calculated by taking the quotations at the end of each month in the year, and ascertaining from them the average of the year VII.— VARIATIONS IN GENERAL PRICES AND IN THE PURCHASING POWER OF GOLD. In order to judge of the present and future demand for money, and to solve the general problem of prices and of money, it must be remembered above all things that in modern times a great change has taken place in conditions of essential importance for that problem. The develop- ment of credit and of banking has revolutionised the conditions on which the use of money depends, as much as the development of railways and of steamships, the Suez Canal, and the telegraph, have revolutionised the business of transportation. Comparisons with the monetary ex- periences of former times still have an interest and a lesson for us ; but they are apt to lead to wrong conclusions, because the conditions of the present time have become so entirely different. In ancient times and in the Middle Ages the actual supply of the precious metals was the most impor- tantfactor in making prices, that is, the value of commodities in general expressed in money. Where barter took place money prices were not aifected, and credit transactions played no important part. When the mines of Laurion caused considerable sums of money to flow into the channels of trade, prices in Greece rose at once. In Rome the influx of gold and silver from the treasures of the provinces caused a considerable rise in general prices. On the other hand, in the time of Charles the Great, and for a considerable period before and after his time, we find sm'prisingly low prices, obviously the result of the scarcity of the precious metals in the channels of trade. Differences of opinion may exist as to how great the rise was in the prices of all commodities at the close of the sixteenth century and first half of the seventeenth ; but it is certain that the cause of so great and permanent a rise in prices is to be sought in the extraordinary increase in the produc- tion of the precious metals which took place at that time. As this increase of production went on, some economists of the eighteenth century thought that theflow of silver to the East was a blessing for Europe, since without it an unendurable rise in prices would have taken place. In the period from 1815 until about 1840 Europe's supply of precious metals fell off, in consequence of the decrease in the gold production in Mexico and South America. Huskisson and W. Jacob, the English econo- mist, believed that this was the chief cause of the depres- sion of trade and the low prices of commodities during that time. This opinion was then almost universally entertained; but before long doubts began to be expressed. In a work published in 1843 by J. Helferich, entitled " The Periodic Changes in the Value of the Precious " Metals from the Discovery of America to the Year " pSO," it is said :— "At the beginning of the period between 1815 and 1830, when the stream of the precious metals had Been suddenly interrupted, we find, notwithstanding the de- crease in the chculating medium of Europe, about the same prices that ruled on the Continent at the time of the greatest accumulation of gold. ... It seems to be a characteristic of modern trade that money, as a medium of exchange, tends more and more to lose its influence upon the prices of commodities. . . . Changes in the metallic medium of exchange, so far as they occur in- dependently, and not merely in consequence of the state of trade, are of insignificant importance compared to the extraordinary variety of possible changes in the course of trade. At all events, they are not worth considering as compared to those great changes which credit is constantly able to bring about. It is the characteristic of credit that it is able to draw a line between the two functions of money, its function as a measure of value and its function as a medium of exchange. It creates a medium of ex- change without touching the measure of value. It can make any commodity the medium of exchange, while metallic money remains the standard of value. . . . In earlier times, when there was no other medium of exchange than that which was also the measure of value, when insecurity of property and scanty development of trade prevented the use of credit, then changes in the only existing medium of exchange, a medium which stood by itself because no other commodity was in universal demand, necessarily exercised a great effect on prices. The situation is essentially different at the present time. . . . The greater the range of commercial transactions the less is the influence exercised on the movement of prices by gold as the medium of exchange, and the more independent is the movement of prices." Helferich's conclusion is that the prices of commodities are fixed only by causes inherent in themselves (nach deren eigener Werthestimmung) , and that gold is called cheap or dear according as the level of prices is high or low. Variations in the value of money are consequences of changes in the value of commodities, and not their cause. At the beginning of the decade 1 850-60 the prices of a number of important articles rose considerably, at the time when the extraordinary production of gold in Australia and California took place. This was supposed to be the natural result of the remarkable increase in the medium of exchange, and it was considered needless to search for other causes. When this general rise of prices ceased, after the specu- lative years 1872-73, and when in many branches of trade a continuous fall in the prices of important commodities set in, the change was ascribed, in accordance mth the Quantitdts-Theorie* then generally entertained, to the cessation of the coinage of silver in all Europeon States, and to the appreciable decrease in the production of gold, combined with the increased demand for gold. A very weighty statement to that effect was made by Mr. Goschen, in his address at the Institute of Bankers, April 18, 1883, " On the Probable Results of an Increase in the Purchasing Power of Gold." Mr. Goschen pointed out that since 1871 Germany, the United States, Italy, and the Netherlands had absorbed, in consequence of their adoption of the gold standard, about 200,000,000^. sterhng of gold. This absorption had coincided with a considerable decrease in the production of gold, the annual production having fallen off by 10,000,000/. sterling since 1851. Mr. Goschen laid it dovm as an axiom, universally accepted, that the prices of commodities were affected by the quantity of the circulating medium, which, indeed, found its expression in prices. The extraordinary demand for gold must have brought about a general decline in prices. This reasoning was confirmed by the great fall in prices of important commodities which had taken place in 1883 as compared with 1873. Such a comparison showed a general fall, although exceptional circumstances had maintained the prices of a few articles. Mr. Goschen does not expressly state, yet he obviously beheves, that the demonetization of silver in many countries, bringing about an extraordinary demand for gold, has been the real cause for the fall in prices. This behef is in harmony with his statements made at the International Monetary Conference in Paris in 1878, to the effect that the continued demone- tization of silver would bring about a financial and eom- ' The theory that prices vary with chanptes in the quantity of money. APPENDIX. 211 mercial catastrophe such as had never before been seen. The opinion of Mr. Goschen, that the appreciation of gold was the true cause of the general fall of prices, has been accepted in many quarters in England, and has been accepted still more generally by the champions of bi- metallism on the Continent. Mr. GifFen published in the " Contemporary Review" for June 1885 an essay following the same train of thought (Trade Depression and Low Prices). We will give the essential points in Mr. GiSen's essay. Asa proof of the e.Ytraordinary fall in prices, he presents a comparative state- ment of the wholesale price of 16 important articles. App. XVI. Prices of Lba.ding Wholesat.e Commodities in January 1873, 1879, 1883, and 1885 compared. Scotch pig iron Coals . . ■ - Copper, Chili bars Straits tin ■Wbeat, Gazette average „ red sprjng, at New York Flour, town made „ New York price Beef, inferior - „ prime small Cotton, mid. upland - Wool - - - - Sugar, Manilla, muscav Coffee, Ceylon, good red Pepper, black, Malabar Saltpetre, foreign 1873. 1879. 1883. 1886. - pr. ton 127«. 00C". 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It would not be difficult to get any number of single statements on this subject, from which, however, no general conclusions could be drawn. It is exceedingly difficult to get tables, even for small districts, which can be used with any confidence as indicating, even approximately, changes in the value of land. In general it is well known that the price of landed estates rose greatly in the '60's and in the early part of the '70's, and it is known that this rise in price has not continued since. But how great was the change in the general level of prices is indicated by no trustworthy statistics ; and we are not able to fill this gap. In the absence of better information we venture to present a few statements of the rents paid in former times and at present for certain domains* of Prussia. As these domains are generally leased for long periods, as a rule, for 18 years, their rents are likely to run parallel with the selling prices of private estates of a similar kind, and indicate pretty closely what was the movement in the prices of the latter. It is true that on the renewal of some of the leases, whose totals we present, new conditions were inserted ; but changes of this kind were made, on the whole, to no great extent and may fairly be disregarded. In some countries, in former times, personal considerations had an effect on the leases, but this was not the case in Prussia. The domains yielded as follows in the budgets of the years mentioned : — year, and refer to dwellings in which no changes of impor- . virr tance were made during the whole period :— App. XVJ. In the old Provinces. 1850 1860 1870 1880-81 1884-8.5 1886-87 from ;:118,228 ha „ 295,155 „ „ 296,580 „ „ 290,-176 „ „ 288,731 „ ,, 287,889 „ M. 4,486,947 pr. 5,179.209 7,847,265 10,054,714 10,927,170 11,010,410 . M. 14 17 26 34 37 38 pf. 10 56 46 61 86 25 In the newly acquired Districts. M. M. pf. 1870 from 61,949 ha 2,057,000 pr. ha 39 60 1880-81 „ 53,214 „ 2,542,533 „ 47 78 1884-85 „ 50,847 „ 2,666,864 „ 64 45 1886-87 „ 50,70S „ 2,680,155 „ 52 85 It appears that in the old provinces rents rose between 1850 and 1886-87 from 14.10 marks per hectare to 38.25 marks per hectare, that is, 171 percent. In newly-acquired districts rents rose between 1870 and 1886-87 from 39.60 marks to 52-85 marks, or 33 per cent. The net yield of the land tax on all the domain lands was, in the budget of 1884-85, 7,658,401 marks (on 339,578 hectares cultivable ground), while the rents yielded 13,735,677 marks, or 40. 46 marks per hectare. ' The leases of domains of which earlier leases were thrown up between 1874 and 1875 yielded the following results ; — Years. Number of the Farms. Size. Former Rent per ha. New Bent per ha. More Eent per ha. 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 188.1 46 58 48 49 36 43 Marks. 16,130 18,3.57 16,981 20,430 20,747 27,827 18,723 20,211 16,602 26,097 14,092 f 18,873 former } !. 18,690 present ) Marks. 28,„ Marks. 43,jg 31,07 43,15 31,48 48,83 29,,, 51,99 26,„, 34,a5 28,„ 36,96 31,49 33,93 38,„ 41,5, 37,M 39,54 35,20 51,58 36,15 46,69 34,K 45,34 Marks. 14„5 12^)8 17,35 22,00 1,6. 16,36 10,5< U,ot The following statement of the changes of the rents of certain dwelling-houses at Hamburg during the last 35 years will be of interest. They do not indicate, of course, changes in rents in general, but they are worth noting because they rest upon detailed inquiries made year for Rents paid, inclusive of Allowance for void Houses. Yciu-s. 9 Estates ae with High (Its. 10 Estates with Low Rents. 1850 - Marks. 33,955 Rise. 100,0 Marks. 56,762 Rise. 100,0 iRr,,*; 38,374 113,0 65,822 100,1 1860 - 49,104 ■ 144,6 69,268 106,3 1865 - 51,620 151,, 63,858 114,5 1870 - 67,635 169,, 75,119 134,, 1S75 - 64,071 188,7 07,260 174,, IMSO . 72,173 212,6 109,242 195,9 1885 - 73,131 215,4 116,242 208,5 1886* - 72,817 214,5 111,474 211,9 * The sum given tor the estates with low rents for 1886 is only for nine estates, as one of them had to be pulled down for rebuilding; in the calculation of the rise this has been taken into consideration. We have at hand detailed calculations of the living expenses of two famihes in Brunswick, each consisting of six persons. One was the family of a working man in fairly good circumstances ; the other that of a Government official not highly placed. The expenses are the general current expenses, including rents, fuel, and clothing, but not including outlays for education, medical attendance, amusements, or taxes. An exact detailed account is ont given, but only an approximate statement which, however, has the advantage of having been prepared Whout any bias 61 any social prejudice, and on the same method for the same place since the year 1860. (See " Betheiligung am Gewinn und National- Versorgung," by Dr. H. Scheffler, Brunswick, 1876. We have also later communications from the author.) Years. For a Workman's Family. For an Official's Family. 1850 M. Pf. 794 40 (100) M Ff 1120 50' (100) 1870 1203 30 (161) 1905 60 (170) 1875 1395 90 (176) 2181 30 (195) 1885 1359 80 (171) 2341 24 (209) In regard to retail prices for the same years we are able to give, again on Dr. ScheflBer's authority, the following statements : — Beef, small, per lb. ■ „ large „ Veal, small „ „ large „ Pork „ Butter Flour, per centner - Rye flour Eggs, per schock Milk, per quartier - Wages of a maid, per year. Wages of a laundress, per day. Wages of a seams- tress, per day. Wages of a labourer, per day. Wages of a mason, per day. Wages of a carpenter, per day. Hire of 2-horse car- riage. Strictly, Domanen-Vorwerke. 1870. 1876. M. 0,30 0,35 0,25 0,33 0,80 ],60-0,60 10,00 6,00 1,60 0,11 36-48 1,00 0,70 1,00 1,45 1,60 7 M. 0,50 M. 0,66 0,60 0,65 0,40 0,50-0,60 0,70 0,70-0,75 0,60 0,65-0,70 1,00-1,40 1,16-1,50 20,00 16,00 12,00 11-12 3,00 3,50-4,60 0,14 0,16 72-90 90-160 1,26-1.50 1,60 1,20-1,50 1,50 1,50 2,26-2,50 2,13 3,50 2,60 3,50 13 18 M. 0,60 0,60-0,66 0,46 0,70-0,75 0,60-0,70 0,05-1,50 16,00 12,00 3,00-4,00 0,16 120-150 1,76-2,00 1,50-2,00 1,76-2,00 3,20-3,50 3,20-3,50 24 .54648. Ee 218 llOYAL COMMISSION ON GOLD AND SILVER r . vvr In England several attempts have been made to ascertain '■ the changes in the general purchasing power of money by ' referring to the average costs of supporting persons m the same manner in large iiistitutions. As we shall deal m the present publication chiefly with prices at Hamburg, we insert statements of the average cost of support at a large institution at Hamburg, the General Hospital. We have to deal here with the support of about 1,700 persons per day or 620,000 per year, and with a careful and economical administration, in which everything is bought on a large scale. In this institution the cost of board per person (patients and employes included) has been as follows since 1841 :— - Daily. Annual. - 1841-60 pr. 37,0 M. 134,99 (100,,,) 1861-60 ■i2,9 166,60 (116,o) 1861-70 62,a lii(i,r,fi (141,2) 1871-76 75,8 276,76 (206.o) 1876-80 80,0 336,3.1 (241,„) 188l' - 89,7 327,44 (242,6) 1882 - 87,4 319,16 (236,,) 1883 - 86,a ;314,48 (233,„) 1884 - 80,7 i'js:!'.) (218,,) 1885 - 76,0 273,68 (202,,) 1881-85 83,8 806,01 (226,,) It appears that the cost of board rose between the decade 1841-50 and the year 1881 by more than 14.5 per cent. Since 1881 there has been a fall, though not a considerable one. Until 1870 the rise in price was a moderate one; thereafter it was rapid and great. A considerable part of the increase in expense is shown by the accounts to have arisen from the much higher prices of meat, milk, butter, &c. But this does not suffice to explain the extraordinary increase in expenses, which must be ascribed in part to the fact that the board has become better and more liberal since 1870. Yet, even if due allowance is made for this circumstance, the fact of a noteworthy increase in the rise of board from 1871 to 1883 is not to be denied. The statements in the preceding paragraphs of the changes that have taken place in the cost of living, in wages, in salaries, &c. by no means pretend to give an exhaustive treatment of these matters. They are meant only to make clear that the statistics of the prices of com- modities alone are by no means decisive of the question of a change in the purchasing power of gold. But they show clearly that the gradual changes in tlie standard of living of different classes have a great effect on the value of money, and perhaps deserve more attention than the wholesale prices of commodities. Yet we should not have a measure of changes of this kind, even if we had a series of statements showing the expenses of living for different families of the same position in life and of the same numbers, and even if we could make comparisons of such cases ; for the money expenses of different classes for these purposes are not likely to increase or diminish in the same degree at different places and different times. One family perhaps spends 60 per cent, more than was spent by a family in essentially the same circumstances 30 or 40 years ago, and is not conscious of incurring any unnecessary expense. Another family perhaps expends but 30 per cent, more ; and there may be innumerable variations. How can we get a trustworthy average under such circumstances ? Whatever method be adopted, notwithstanding the most complete statements and the greatest care, it is impossible to get an expression in figures of the changes in the pur- chasing power of money. Yet it cannot be doubted that the increase in the standard of living in almost every class in civilized countries has brought about a rise in money payment for personal services of every kind, and that this increase has taken place even in times when the wholesale prices of important commodities were failing. An important circumstance, serving to explain the fall in wholesale prices while the cost of living was rising, or at least remain unchanged, is the cost of distribution ; that is, the addition to prices in the course of jobbing and retail trade, which goes far to offset for consumers the cheapening of production. A natural consequence of the state of things sketched in the last few pages is that the continued and considerable fall in the prices of commodities generally bears hard on men of business and on invested capital, and not" on the workmen. Everyone can observe this effect for himself, yet its eminent importance makes it worth while to present an unusually clear confirmation of the rule, brought out by a statistical compilation as complete and instructive as could be imagined. The Belgian Minister, Primez, published in September 1884 a work, entitled "La Crise; Examen de la Situation ificonomique de la Belgique," (Brussels), at the close of which there is a table giving exact statements, compiled in the same manner year after year for the 24 years from 1860 to 1883, in regard to the production of coal in the province of Hennegau. Between 60,000 and 83,000 work- men are employed, and as many as 13,500,000 tons of coal are annually produced. Lack of space prevents us from giving the results for each year, and we must content ourselves with average statements for the three periods 1860-71, 1872-76, 1877-83. Letters which the author has been kind enough to send enable us to present also the figures for the years 1884 and 1885. Exploitation Houillierb du Hainaut 1860-1885. 1860-1871. 1872-76. 1877-83. - 1884.- iss,-,. Production ..... Millions de tonneaux 9,0 11,. 12,0 13,5 12,9 Depenae ..... Millions do francs 91 58 120 11.5,, 101, 6 Valour ....-- „ 102 182 ( 122 129,6 lli„ B6n(5flce - . . - . „ 10,2 24.1 1,9 4„ 5,i 'Main.d'oeuvre - Francs et Centimes 5„2 8.3. 5,6, 5,32 '1.-1 Prix de Revient , »,,(.-„<. f™;„ par 1,000 Ml. "^ Autres trais „ „ 4« 6.M . 4,36 3,93 3.;i iTotal „ 10,21 IJ',2., 10,03 9.25 8i:, Prix de vente par 1,000 kil. - ., 11.33 10.38 10,1B 9,59 8,;;, B6n4fice „ „ „ ■ ,. 1,12 2,13 0,15 Ohi "39 Sommes payees en salaires - Millions de francs 62 95 71 71,9 61 2 Nomlare d'ouvriers . . - - Milliers d'ouvriers 65 79 76 78,8 76,9 Salaire moyen par ouvrier - Francs 797 1,173 897 911 TtKi Part du travail dans le produit, dcSduction de8 autres frais. Proportion pour 100 83 82 97 94 92 The figures of this table speak so plainly that there is hardly occasion to comment on them. The statements for single years bring out even more clearly the remarkable changes resulting from the excessive rise of prices in the speculative p3riod 1871-74, and from the low prices of recent years ; yet the averages of longer periods are more significant of the actual course of events, If we compare tlie year 1885 with the decade 1860-71, we find that ths price oC coal fell -from 11,. '33 to 8.88 francs per 1,000 kilo- grams; that the profit sank from 1.12 francs to 0,3?) APPENDIX. 219 francs per 1,000 kilograms ; that wages, notwitlistanJins; the reduction which liecame necessary in 1885, remained at the same point as in 1860-71. Meanwhile the profits, inclusive of interest on capital, sank from 10,200,000 to 5,500,000 francs ; and averaged during the years 1877-83 only 1,900,000 francs. The share of labour in the total product, after deducting other expenses, was 83 per cent, in 1861-70 and !)2 per cent, in 1885. The depression of trade, whether the result of scarcity of gold, of over-production, or of other causes, bears incomparably harder on capital and the business man than on waj^es and the workman. We now leave the question of changes in the value of money in its relation to expenses of living, wages, &o., and come to an end with the digression which its dis- cussion caused us to make into the closely related field of the social question, ^^'e turn to investigations of the prices of commodities. As we \\a\e seen, general prices are still treated in some quarters under the influence of the so-called Quuniltats-Theorie, while in other quarters it is considered quite independently of that theory. It is not within the scope of the present publication to express an opinion as to the soundness of one or the other of these views. Our task is simply to ^ present impartially the difPerent \'iews and the materials for understanding them. In what has preceded and in what will follow we use the words " money " and " gold " indiscriminately. This does not really cause any uncertainty of meaning, sirice gold is du'ectly or indirectly the sole measure of value in the wholesale trade of all commercial countries, even though the medium of exchange may consist of silver coins, accounts may be kept in them.* It has already been pointed out that both in domestic and in international transactions actual gold is little used, in compaiison to the use of credit and bank clearings. But we should not fail to take account of the repeated and emphatic assertions that this substitute for gold is available only in ordinary times. In case of a future general crisis or shock to credit, we are told it would be impossible to concei\'e the intense demand for actual g'old which would set in, and the downward pressure which would be exerted on prices. But it haa also been pointed nut that when such a catastrophe sets in, it makes little difference whether silver is a legal tender in addition to gold. At such times one must be prepared not only for a demand for the payment of bank notes, but for the pay- ment of aU debts payable on demand by banks. The total deposits alone in the 10 London joint-stock banks amounted at the close of 1883 to 123,267,000^, while these banks hold in their own vaults and in the Bank of England only 1.5,911,000?. in cash. The total deposits and accounts-cmTent of the banks of the United Kingdom reached on the 1st of July 1886 the colossal sum of between 570,000,000?. and 580,000,000?., whereas the Bank of England held only 27,481,488L of gold. Even if the metallic reserve of the Bank of England were to be doubled, or more than doubled, it would still be very small in comparison to the demand obligations in the United Kingdom which would all be thrown on the Bank of England. In crises of this kind, which fortunately are likely in the futtire to occur less frequently and to pass by more quickly, the only resource after all would be paper money inconvertible for the time being. It would be immaterial whether there were a gold standard, a double standard, or a silver standard. Changes in general prices whose cause does not lie in the cost of production of commodities, or in the conditions of their supply and demand, but which are the result of a. cause affecting the medium of exchange, as in the case of an excessive issue of inconvertible paper money,' must affect in the long run all articles alike. It is immaterial whether the articles are sold in large or small quantities. Those changes in prices, however, which are caused by variations in the cost of production of commodities, must show great differences ; and it is only when taken as a whole that they will show such an effect that we shall be able to judge whether there has been a change in the This is clearly expressed in the f oUowinf; remarks macle by an English author :— " There is no denying the fact that monetary systems may be ] called bimetallic, or single silver ; but the income of all nations withm ^^ European control or influence, all wages, all manufactures, all the ^^ world's produce, come at last to be measured in value, solely , and inexorably, against gold, and, inflnitcly more than all corns, I against the unit of the one pound sterling. . . . The relative value of _^ the metals tends constantly to become the same at any given time in ^_ all commercial markets, without reference to which may be the legal ^_ standard in each particular market ; so that, for example, the price of ,_ silver purchased with gold can never vary more than a minute fraction in Calcutta from the simultaneous price in London." IHirehasmg power of money. In the nature of the case It IS impossible to find a method by which we shall be able to inter, with exactness, ft-om a specified number of com- modities, changes in the general level of prices. Nothing more than aj)])roximate estimates can be secured. The late Professor Jevons first proposed, in 1863, the tollowing method :— Ik. began by calculating from quarterly prices the a\'erage prices of a series of important articles durmg the six years 1845-50. He assumed each average price to be 100, and on this basis made a percentage comparison of the prices of the same articles on the Ist of January, or 1st July of each year following. Mr. New- march, and the publishers of the London " Economist," have continued these quotations and calculations of 47 articles upto the present time. The prices of a number of similar articles have been grouped together in making the per- centage circulation, so that at the emj 22 articles are left, for whose prices the so-called index numbers are calculated for comparison with the prices in 1845-50. Adding up these 22 index numbers, and taking 2,200 as the basis for 1845-50, we get the total index number, which serves to indicate yearly changes in the level of prices. The articles included in the "Economist "list are :— Coffee, sugar, rum, tea, tobacco, btltter, wh6at, potatoes, beef, niutton, pork, silk, flax, linen, yarn, hemp, wool, logwood, indigo, sperm oil, petroleum, timber, tallow, leather, salt- petre, timber, potash, copper, iron, leiid, steel, tin, coal, raw cotton, cotton yarn, cottoli goods. ■ The authors of these index numbers did not fail to see the objections to their method, by which the simple addition of the comparative prices of articles of very unequal importance was made to measure changes in the general level of prices. The tables of index numbers in the " Economist " are regularly prefaced by the following note : — " The total index number does not, of course, present a full and accurate representation of the variations in prices, ' inasmuch as it cannot allow for the relative importance of the different articles. Wheat, for example, reckons for no more in the total index number than indigo ; and during the years of the high price of cotton and cotton fabrics, the total index number is in a measure unduly raised by that special cause. Still the total index number, read with the needful qualification, may afford important inferences." Mr. Hans Forsell, some time Minister of Finance in Sweden, differs from this judgment in his recently pub- lished work, entitled " Guldbristen och de laga Varu- prisen" (Stockholm, 1886). On the contrary, he con- demns emphatically the method of total index numbers, and all conclusions drawn from them, because they fail to take account of the relative importance of commodities. By adding or omitting a few important articles of com- merce, the total index number might be made to rise or to fall according to the wishes of the compiler. The total index numbers, therefore, prove nothing whpiever. Mr. Forsell thinks the extraordinary fluctuations in the prices of many articles can be explained from separate causes, which have no connexion whatever with the purchasing power of gold. Mr. Palgrave has endeavoured to free the total index numbers, to which much weight is attached in England, from the objection that they fail to consider the relative importance of commodities, and has caused Mr. Nash to ]irepare for his memorandum, already referred to, a new calculation of index numbers for the 22 articles of the " Economist " list. For the new index numbers the basis (100) is not taken for the years 1845-50, but for the years 1865-69. Mr. Nash illustrates the great i«mportance of considering the relative importance of commodities by the example of wheat and indigo, which has been abeady alluded to. The value of the net import of mdigo into England in 1885 was in round numbers 600,000?. The value of the imported wheat and flour, plus that of the domestic production of wheat, was 49,350,000?. Wheat, therefore, was an article 82 times as important as mdigo, and a rise or fall of only 1 per cent, in the price of wheat, therefore, should have in a properly constructed table of index numbers the same importance as the rise or fall of 82 per cent, in the price of indigo. Mr Nash calculates for the years 1865-85 the value of the quantity annually consumed of each of the 22 articles in the United Kingdom, and assigns a figure indicating its relative importance to each commodity, I he results of this method will appear sufficiently from the following table for the years 1865, 1875, 1885 :— Ee 2 App. XVJ, 220 ROYAL COMMISSION ON GOLD AND SILVER App. XVL 1863. 1876. 1886. Consumption. Index Number. Consumption. Index Number. Consumption. Index Number. Cotton - 47,000,000 428 ( 19,5) £ 89,700,000 311 ( 14,1) 31,600,000 263 ( 12,0) Silk 6,300,000 57 ( 2,s) 2,100,000 17 ( 0„) 1,400,000 12 ( 0,5) Hemp 9,900,000 90 ( 4„) 7,460,000 68 ( 2,6) 5,900,000 49 ( 2,s) riax and Wool - 18,400,000 168 ( 7,.) 21,300,000 167 ( 7,«) 17,100,000 U2( 6,5) Meat 44,300,000 406 ( 18,i) 65,500,000 435 ( 19,s) 63,000,000 524 { 23..) Iron 12,000,000 109 ( 5,o) 16,200,000 127 ( 6,8) 18,000,000 150 ( 6,8) Copper 4,800,000 44 ( 2,„) 4,650,000 37 ( 1,7) 4,680,000 39 ( 1„) Lead 2,100,000 19 ( 0,9) 3,100,000 24 ( 1,1) 1,560,000 13 ( 0.e) Tin - - - 1,300,000 12 ( 0,0 2,000,000 16 ( 0,7) 1,800,000 16 ( 0,7) Timber - 17,800,000 160 ( 7,3) 20,000,000 157 ( 7,1) 19,660,000 164 ( 7,5) Tallow - 5,100,000 47 ( 2„) 3,960,000 31 ( 1,4) 3,340,000 2S ( 1,3) Leather and Hides 5,600,000 61 ( 2,3) 8,800,000 69 ( 3„) 9,600,000 80 ( 3„) Indigo 200,000 2( 0,1) 800,000 3( 0,1) 600,000 5( 0„) Oil - - . 5,500,000 50 ( 2,3) 4,900,000 38 ( 1,) 6,900,000 49 ( 2,2) Coffee 1,400,000 1S( 0,») 1,500,000 12 ( 0,.) 930,000 8( 0„) Sugar 11,000,000 100 ( 4,5) 21,000,000 166 ( 7,5) 17,920,000 149 ( 6,8) Tea - - - 7,300,000 68 ( 3,„) 11,100,000 87 ( 4,„) 8,500,000 71 ( 3.2) Tobacco - - . 2,600,000 24 ( 1,1) 2,600,000 20 ( 0,s) 3,600,000 29 ( 1,3) Wheat and Flour Total - 39,000,000 356 ( 16,i) 64,800,000 427 ( 19„) 49,360,000 410 ( 18,6) 241,600,000 2,200 (100,„) 280,360,000 2,200 (100,„) 264,320,000 2,200 (100,„) This memorandum, moreover, contains a similar calcula- tion of the changes in the prices of 22 articles in France, as reported in the French trade statistics. The relative importance of commodities is taken into account, and the prices ascertained by the Commission Permanente des Valeurs are used. The articles selected are — coffee, sugar, cereals, beef cattle, butter, rice, tobacco, linseed, palm oil, tallow, silk, cotton, wool, hides, coal, iron, steel, copper, lead, zinc, and the following articles of export, silk goods, woollen goods, and gloves. It is true that only important articles are on this list, but the enormous difference in their relative importance^ is easily seen. For instance, for the year 1883 cereals are reckoned at 375,000,000 francs, wool at 318,000,000 francs, whilst zinc is put at 13,600,000 francs, and imported iron and steel at 27,100,000 francs. The quantity of each commodity produced at home is left entirely out of account. The years 1865-69 were again used as the basis for this French calculation. The reason was that no figures for the period before 1869 exist for prices in India, with which a comparison was sought. We now present the total index numbers of the level of general prices as ascertained by the various methods just described : — Total Index Total Index Total Index Numbers without Numbers with Numbers with Tears. Allowance for Allowance for rela- Allowance for rela- relative Importance, London Econo- tive Importance, tive Importance, French Statis- London Econo- mist. mist. tics. I860 2,434 2,366 2,331 1866 2,449 2,434 2,380 1867 2,166 2,179 2,144 1868 1,982 2,05S 2,110 1869 1,979 1,963 2,046 1866-69 2,200 (100) 2,200 (100) 2,200 (100) 1870 1,995 91 1,975 90 2.000 91 1871 1,981 00 2,046 93 2,250 102 1872 2,132 97 2.197 100 2,310 106 1873 2,287 102 2,298 104 2,300 105 1874 2,207 100 2,.378 108 2,125 97 1875 2.098 96 2,125 97 2.085 93 1870 2,044 93 2,186 99 2,090 95 1877 2,084 94 2,205 100 2,107 96 1878 1,910 87 2.081 95 2,010 91 1879 1.676 76 1,805 82 1,915 87 1880 1,918 87 1,967 89 1,937 88 1881 1,782 81 2,064 93 1,900 86 1882 1,830 83 1,908 87 1,866 84 1883 1,755 SO 1,924 88 1,766 80 1884 1,660 75 1,760 80 1885 1,650 70 1,669 76 If we compare these tables, we are surprised to find that the index numbers reached by the different methods do not vary greatly from each other. The great fall in prices in the decade just passed comes out with equal clearness in all of them. We do not believe, however, that this agreement disposes of all criticism of the tables. These attempts to secure some degree of confidence in the approximate correctness of the index numbers, as modified by the consideration of the relative weight of commo- dities, are yet open to serious objections. Above all, it is said that the consideration of no more than 22 articles, however carefully they may have been selected, neglects a number of very important articles whose prices are of great importance when we try to determine the purchasing power of gold. Not less well founded is the objection that a great rise or fall in the price of a few important articles on the list, although caused by speculation and of only tempo- rary duration, may exercise a great effect on the index number arrived at. For the French figures a closer exami- nation shows that the relative weight of the 22 com- modities has been assigned in a careless and misleading manner. Our wish to secure room for a detailed presentation of the true average prices of 100 important commodities in Hamburg in the years from 1847 to 1885, and the objec- tions against the "Economist's " figures and other figures meant to indicate the general level of prices, induce us to omit in this edition of the " Materials " the detailed pre- sentation of the "Economist's " tables, and to content ourselves with the summary tables given above. We cannot omit, however, from these " Materials," in the present stage of the silver question, a statement of prices in India since the beginning of the depreciation of silver. But we are compelled to condense it. It is derived from the communications made by the India Office to Mr. Palgrave and published by him in his memorandum. The prices for ordinary rice and for wheat are the average prices of six places. Those of other articles are prices at the places of export. The prices of cotton is that of fair Dhollera at Bombay. APPEJSDIX. 221 Rice (comraon). Wheat. Cotton. Castor Oil. Linseed. Jute. Hides. Sinking of Rupees per Maund Silver Years. Seers per Rupee. ludex Num- ber. Seers per Rupee. Index Num- ber. Rupees per Candj. Index Num- ber. Rupees per Maund, Index Num- ber. Index Num- ber. Rupees per Bale. Index Num- ber. Rupees per Corse. Index Num- ber. in com- parison with Gold. 1863-69 - 16.63 ^00,00 15,58 •'OO.oo 263 ^00,M 11,61 ■loo-m 4,63 ^00,00 in,26 /oo,oo 49.25 ■lOOm l.O0O«, 1870 ; - 19,61 *i.80 15.7.1 99-23 244 9^,17 n.,; ■tosaa 4,m 92,87 2fi,25 '■3(5.25 56,50 iiihii 965,0, 1871 20,95 72.22 22„o 70,43 209 79m n.n„ 99.56 4,40 9«,03 24,87 ^29,u 64,00 ■imm 992,10 187'2 23,76 69,m 19,.JT 7«,oi 245 93.15 13,00 ■>-)im 4,76 ^0«,7s 21,32 H0,m 01,75 ^2a,3s 976,14 1873 20„5 79.76 18,93 SS.08 203 77.18 12,40 ^oO.m *,94 ^o6m 10,8, fOS.u 77,25 1^6,^ 9.58,85 lS7t M,53 ^■'iyU, 1S.7J S«,90 1B9 60,K 11.8, ^o^,^^ 4.75 ^0!l,si 22,87 ''«,74 81,75 I6s,^^ 950,19 1S73 17,5, 94.54 23,13 (57,35 167 6s,^ 9.26 79,75 4*4 «7.25 19,60 101m 71,25 ^44,67 927„i is7i; 15,60 i06.ta 2-t.4, (5«.so 178 67m 9.81 S4,i9 4,16 «9.84 22.25 HS,i2 70,50 ^43,14 879,79 1877 15,63 ^06,3, 18.91 S«,39 192 7Sm 13,56 ««.79 4.60 99.35 26,12 135^ 60,00 *25/,82 891,90 1878 11,92 i3g,si 13.42 -i-i6m 195 74,14 14.93 *2S.59 4„2 106,2S 27.25 i¥,i% 64,00 ^29,94 849.16 1879 12,5, ^3«,82 W,67 '«5.20 224 Ss,„ 12.87 ■i-io,^ 6,«, «0,41 27,50 iifim 71,00 •'44,16 856,33 1880 17„2 97,13 16,39 9S,05 208 77,18 10,75 92,59 4.59 99,13 28,„ H6,ii 78,00 ««,37 856,1, 1881 22,.,, 74,64 18,57 *S,89 188 7^,48 10,18 S7,68 4,23 9^36 26,00 iis,^ 69,50 ^4^,U 863,49 1S82 22,6; 7^.35 18.87 S*56 181 <5*.82 10,01 S6,2i 3,76 *^,20 19,03 9«.80 66,00 ^34,01 837,61 1883 - ■ - 18,05 9«.13 18,96 «*17 174 «.16 10,78 92.85 4.08 SS.Ts 23,75 •'23,31 80,00 ^(5j8,4S 838,09 1881 l-t,™ ^is.n 21,36 7«,93 195 74.14 10,50 90.43 4,20 O0,n 20,50 •'Otf.u 79,50 ■I6-I,i2 828,31 1880-8* - 18,56 90^ 18,83 asa 188 7^.48 10,44 «9.92 4,17 . 90,06 23,51 «S.06 74,60 ■ISItn, 842,71 App. XVI. Mr. Barbour, Secretary of Finance to the Indian Govern- ment, has given his attention in the work already referred to (" The Theory of Bimetallism, 1886 "), to the movement of prices in India under the influence of the depreciation of silver. His investigations indicate that from 1873 to 1884 there was a slight temporary rise in the prices of articles of export in Calcutta, but that in 1886 a distinct fall set in. The silver prices of articles of import had not risen in India in proportion to the lower prices of silver, but, on the contrary, had fallen somewhat. For instance, 100 yards of grey piece goods, which had cost in the year 1874-75 13 rupees 1 anna, cost in 1884-8.5 10 rupees 8 annas. These statements referred to prices at the sea- ports. Whether prices in the interior had risen it was impossible to state e.xactly, in view of the extraordinary differences in the circumstances of the different parts of that enormous country. But it is certain that the wages of skilled labour, masons, carpenters, blacksmiths, &c., had risen everywhere. We are indebted to the " Hamburg Prices Current for Money," which were issueci every Tuesday and Friday, for the complete and eiact quotations which enabled us to ascertain month for month and year for year the ratio that existed in free markets between gold and silver during the 144 years from 1687 to 1830. We are similarly in- debted to the Official Trade Statistics of Hamburg for material for ascertaining the annual wholesale prices of commodities from 1847-85, material which is complete and trustworthy to a higher degree than any known to us. Throughout this period Hamburg was an important market for almost all raw materials. Moreover, it has been a free port, without duties or differential taxes. Commodities imported are declared in writing, with a state- ment of their weight and of their ordinary trade designa- tions. Their value is stated separately for each com- modity, either according to its price on 'Change that day, or if there were no quotations, according to the probable price, which was to be, in the absence of (jther data, the purchase price plus the cost of importation. For con- signed goods a careful estimate of the prices sufficed, sometimes supplemented with a statement of their insured value. These declarations, which were carefully supervised, were then collected by the Bureau of Trade Statistics, and tables were made out of the quantity and value of goods exported and imported. In these tables we find the average prices for each year for a large number of articles (in 1885 for 318 articles), all based on the declarations mentioned. Prices are given not only for each article, but for each article according to the place whence imported. The quantities and kinds of many important articles undergo changes in the course of decades, and it seemed therefore proper to take no account of the different kinds of each article, but to treat all kinds as one in order to get a general indication of the changes in prices. Some five years ago the Bureau of Trade Statistics at Hamburg prepared, at our request, on the method of index numbers, a " Statement by per cents, of " the changes in five-year and ten-year periods of the " average prices of 100 articles of trade, in the years from " 1851-80, compared with the average prices of the years " 1847-50." We published this statement, which has since been frequently cited in our essay on " The Statistics " of the Precious Metals, 1876-80,"in the " Jahrbiicher filr National-Oekonomie," new series, vol. iii. It has been objected to this compilation that the period from 1847-50 is used as the basis, whereas the decade from 1841-50 would have been preferable. This may be freely admitted, and had we had a choice we should certainly have used the period 1841-50 rather than that of 1847-50; but for the period before 1851 we possess statements only for the four years preceding. A change in our initial year was therefore impossible. Other objections to this compilation, however, which are directed against the selection of the articles, are not without foundation. It would lead us too far to discuss them here in detail. We have carefully gone through the list of articles again, and have excluded those for which the Hamburg wholesale prices are not fairly to be considered indicative of prices in general trade. Some articles now of importance cannot be considered at all in this comparison, because they have come into general use since 1850 ; for instance, petroleum. Another essential change has been made in the compilation, in that a number of very im- portant articles are now included in them for which the official declarations gave no figures. Their wholesale prices since 1877 have been ascertained from the yearly accounts of large institutions at Hamburg. This has been done especially for meat, butter, milk, and eggs. The prices of yarns and cloths, which were embraced in the earlier com- pilation from the Hamburg prices, have now been excluded since the indirect influence of the German import duties on the importation of cheaper grades prevents the prices from indicating the general range of prices of such articles In their place we have given corresponding average prices of yarns and cloths exported from England, as well as the prices of some other articles of manufacture, all derived from the British trade statistics. The first edition of our " Materials " indicated the average prices not of each year, but of periods of several years, namely, 1851-60, 1861-70, 1871-75, 1876-80, lg81_84. The wish has been expressed in several quarters that the tables should be completed by giving the average prices for each year, since such prices would serve to indi- cate more clearly and accurately the changes in the general level of prices and the movement of the prices of individual 222 ROYAL COMMISSION ON GOLD AND SILVER : A.FP. XVI. articles. We could not but admit that this wish had its iustification, the more so as we have become convinced that the 22 index numbers of the English publications fulfil their object very insufficiently, and may be replaced with advantage by a more detailed statement of average prices at Hamhurg. The great importance of this statement of average prices lies in the general survey which it gives of the average prices of the most important articles continuously since 1851. Prices can be followed here, year for year, by them- selves and in their connexion with other prices, and, more- over, with assurance that they are not based upon esti- mates, but upon direct trustworthy declarations from men of business. In addition, we present, on the method of total index numbers, per-centage calculations of changes in the level of general prices. We believe that these calcu- lations have a good claim to approximate accuracy because of the large number of articles on which they are based ; yet we . are quite aware that our calculations, like others, must be used with every caution. The Hamburg Bureau of Statistics, knowing the wide interest and great importance of the calculation of the movement of actual average prices per year of 114 im- portant commodities during the period from 1851 to 1885, wished to present, so far as this could possibly be done, trustM'orthy figures and calculations. The Bureau, there- fore, thought it desirable to submit earlier results, as they had been published in the annual tabular statements of the trade of Hamburg, and had been printed in our first edition to a thorough and detailed revision. The result has been that changes proved necessary or desirable only for occasional articles in single years ; and such changes as were made, barring a few exceptional cases, were fairly to be considered irrelevant. For the sake of exactness, however, they have been used in this new and final com- pilation of the Hamburg prices, and will serve to explain variations from the figures of earlier publications. The prices of various agricultural and animal products are, perhaps, not to be considered authoritative for whole- sale trade in so high a degree as those for other articles. We therefore add a statement of the average prices of certain commodities of this kind in Prussia during the period from 1861 to 1885, obtained from the " Zeitschrift d. " Kgl. Preuss. Statistischen Bureaus, I88(j, Heft I., II., " besondere Beilage," p. 80. Per 100 kilograms. - Wheat. fije. Barley. Oats. Pota- toes. iieef. Pork. Yeai's. M. pr. 100 kg. M. per 100 kg. M. per 100 kg. M. per 100 kg. M, per 130 kg M. per kg. per kg. 1801-1865 - 18,82 13,78 12,12 11.S2 4,S8 0,82 0,93 18i;iM870 - 22,0.2 17,16 ir',18 15,08 4,96 0,92 1,11 1871-1875 - 23,^2 17,92 17,08 16,32 «,0i 1,15 1,26 liTJ-lSSO - 21,u 16.62 16,20 15,2+ 6,06 1,15 1,24 1881-1885 - 18,96 16,00 15,16 14,58 5,26 1,18 1.2; 1881 • 22„„ 20,20 16,60 15,90 5,70 1,« 1,28 1882 - 20,80 16,10 16,40 14.C, 4,95 1,16 1.2i 188.'3 - 18,50 M,70 14,60 13,70 6,15 1,20 1.2i 188i - 17,30 14,70 14,90 14,10 4,90 1,20 1.S0 1885 - 16,20 14,30 14,30 14,30 4,60 1,19 1j20 It goes without saying that we do not mean to add comments on the fluctuations or permanent changes in the prices of the different articles during the last 35 years. To do this we should have to write a complete history of trade during the last decades, such as would occupy, with all possible conciseness, too much space for the present publication. But remarks on certain particularly notice- able changes in the prices of important articles will be found at the close of the tables. APPENDIX. 223 Average Price of 100 Articles op Trade in Hamburg during the Period from 1851 to 1S,S5 as compared with '^""l^^^- the Average Prices from 1847-1860 ; together with the corresponding Proportionate Numbers aocorcimg to Returns by the Hamburg Bureau of Trade Statistics. ■Xeiii'S. 1847-1850 1851 1853 is;3 1864 1856 1851-1856 1856 1857 1858 1859 1860 1856-1860 1861 1862 1863 1864, ISBo 1861-1866 1886 lWi7 1868 1869 1870 1866-1870 1871 1873 is7:i 1874, 1875 1871-1875 1876 1877 1878 1879 1880 1876-1880 1881 1882 1883 1884 1885 1881-1886 I.— AOBXCULTUEAL PEOBUCE. 1. Wheat. M.per 100 kg. Propor- tionate Numbers, 2. Flour. M.per 100 kg. Propor- tionate Numbers. 3. Rye. M.per 100 20,3, 28,« 27,30 20,88 20,10 23,06 24,92 26,9, 23,22 20,5„ 23,72 21,24 24,32 21,42 21,36 21,74 22,02 22,21 20,« 18,66 16,78 15.33 100,00 S9,5i 108,33 13.J.25 160,49 119,75 150,62 113-71 101,23 118,52 116.36 126,„ 118,83 103.,7 8.5.SO 104,63 104,63 146,30 140,43 107,41 103,39 120, 123,25 128,1, 133, i4 119,96 105,45 122,02 109,26 125,10 110,19 109,88 111,93 27...0 32.S2 'H.;s 'I,3-18 34,33 "I'-^'OO 33,30 28,56 27,48 3S>i6 32,76 34,92 31,56 26,88 24,60 25,50 34,98 33,12 ■30,06 29,76 31,44 113,27 114,25 106,09 95,89 86,32 78,86 31«o 110, 34,42 119,, 36,52 126,, 34,56 119, 28,38 98,1 31,5:t 31,34 31,46 31,67 31,13 33,32 32,03 28,87 24,50 22,67 28,28 100,a, 86,5, 113,49 l.jfi.aa 118,67 145,23 113,15 98.75 95,02 112,24 113,23 120,75 109,13 92,95 86,06 88,17 ■J3,,7 101.24 120.55 114,52 103,94 102,90 108,71 114.60 102,42 109,06 108,37 108,78 109,51 107,61 115,21 110,75 78,3. 97.79 12.2, 13,80 14.,„ 16,56 21,43 23,28 17.88 21,54 15,36 13,63 14,04 15,90 16,08 15,66 18,98 15,30 12,18 13,62 14,76 15,43 21,30 20,„ 17,53 15,66 18,18 18,70 16,82 18,16 18,48 16,M 17,56 17,20 17,72 14,32 14,50 18,37 16,42 19,76 16,07 14,48 1,3,97 12,21 15,30 Propor- tionaie Numbers. Rj e Flour, M.per 100 kg. Propor- tioniitd Numbers, 100,00 112.75 117,65 135,29 173,.,9 190,19 146,08 176,98 126,49 111,76 114,71 129,90 131; 127,94 138.73 12.5,00 99,51 111.27 120, 12.5,98 174.02 171.08 143,63 127,94 ,,53 148, 152,78 129,25 148,37 160,98 135,95 143,46 140,52 1-44,77 116,99 118,46 150,08 134,15 101,44 131,39 118,30 114,13 99,75 14.S,-, 16,62 20.77 27.42 30,48 23,55 27,24 22,80 21,96 21,42 24,42 23.88 22,92 19,08 16,38 17,88 20,04 21,96 26,34 25,98 21,06 21,72 125,0 23,40 21,32 22,9, 26,16 26,26 22,70 23,48 24,06 23,94 22,26 21,50 26,33 23.42 26,66 21,09 17,97 18,02 16,82 ',48 100,00 111,9! 139,19 150,30 1*4,65 20,5.25 158,69 192,73 18.3,43 153,54 147,68 144,24 164,44 160,81 154,34 128, 110,, 120,. 131,95 147,88 177,37 174,95 141,82 146,26 1,57.58 143.57 164,48 169,43 170,10 1,52.86 168,11 162,02 161,21 149,90- 144,78 170,57 i.:7,7i Oats. M.per 100 kg. 11,16 14,40 l-i,C2 13..-,4 18,00 17,28 15..78 16,68 15,42 14.40 14,3, I 16^,6 Propor- tionate Numbers, Barley. M.per 100 kg. Propor- tionate Numbers, 7. i,Iai/,o. Buck Wheat. M.per 100 Propor- tionate Numbers M.per 100 kg. Propor- tionate Numbei'-s. 16, 172,; 142; 121, 121, 113. ',02 ,35 134-07 14.64 13,68 11,64 13,20 15,42 13,74 15-72 17,10 1Sj30 17,52 1*,54 18,62 15,58 15.02 16.50 18,48 17,68 16.66 17.4, 16,88 14,41 14,06 14,85 16,53 16,75 15,52 13,74 13,74 13-79 14,51 100,00 129.„„ 122,04 139,25 161,29 154,M 141,40 149,46 138,17 129,03 128,49 134,95 136,02 131,18 122,58 104,30 118,28 138,17 12.3,12 140,86 153,23 163,98 156,39 130,29 139,61 134,59 147,85 166,59 158,42 149,28 166,27 161,25 129,39 125,99 133,07 139,1 141 139,, 123,: 123, 123.5 ,13 '.12 130, ',02 14,34 12,00 16,18 14,82 18,78 18.2, 15,78 19,62 17,70 14,82 15.96 16,98 17,M 16,98 16,32 15-24 13,32 15,78 15,5. 18,90 19,92 21,16 20,52 16,20 19,32 18,34 21,90 22,82 22,14 21,84 21j4o 19,50 20,94 20,18 21,90 21.18 20,74 20.89 19.90 17,37 16,13 14,29 1?,: 100,0, 103,86 103,35 130,96 127.;„ 110,0 136,8 123,4 103,3 111,3 118, ',41 118: ',72 ',1-i 118.41 113,81 106,28 92,89 110,04' 108,37 131,80 135-,,, 147,56 143,10 112.,,; 134,73 127,89 162, 159,14 l->4-3 162,3 149,2 135,91 1'16,„3 140,7a 152,72 147,70 144,63 145,68 138,77 121,12 112,48 9!'.,;:, 123,57 1 20.16 1 100,„„ 12,84 100,00 14,22 70-5, 10,20 79,44 22,20 110,13 14,58 113,55 21,36 106,95 18,48 143,93 22,,,2 110,71 18,84 14i;.;:; 29,28 145,34 18,66 145-:;, 21,90 108,63 16,14 123,;,, 30,18 149,70 18,60 144,86 27,54 136,61 17,0. 133,;, 23,02 124,11 15,06 117,29 21,24 105,36 12.72 99,„ 21,60 107,14 15.18 118,22 25,14 124,70 15,72 122,,:, 24,,-,, 121,73 15,66 121,96 22,68 112,50 14.,=„ 115,26 22,38 111,01 13,44 104,67 19,74 97,92 13,80 107,18 18,72 92,86 13,92 108,11 21.C0 107,14 14,34 111-6, 28.08 139,29 14,82 113,42 29,52 146,43 15,72 122,.,3 27,36 136,71 18,.,8 143,93 26,.,6 131,25 17,94 139,72 23,40 llG-07 16,56 128,97 26,94 133,63 16,68 129,9, 24,04 119,25 15,98 124,45 26,58 131,85 16,14 126,70 28,M 142,06 17,68 137,6, 32,60 161,71 17,76 138,32 30,00 148,81 17,04 132,71 28,38 110-77 16.92 131,76 29,34 145,04 19.42 151,25 29,82 147,92 17.86 139,10 29,90 148,31 16,18 126.01 28,43 140,97 17,38 134,58 30,52 161,39 18,48 143,93 29,5., 146,73 17.84 138,94 29,8. 148,02 16,17 128,37 28,88 143,25 17.16 133,64 28,82 142,96 21.80 169,78 29„,5 146,08 15.32 119,31 27-72 i:i7-a. 16.27 126,71 28,94 143,55 17,40 136,5, 224 ROYAL COMMISSION ON GOLD AND SILVER: Apr. XVI. Average I'RiCis of 100 Articles of Trade in Hamburg during the Period from 1851-1885, as compared with by the Hamburg Bureau Tears. I.— Ageicultubal Probjjcb— continued. y. Pulse. M.per 100 Propor- tionate Numbers. 1847-1860 I 12-9 18B1 18B2 1SB3 18B4 18B5 1861-186B 1856 1857 1858 1866-1860 1861 J 862 1863 1864 1865 1861-1865 1866 ]RI>7 lS6.!l 1869 1R70 1866-1870 1871 1872 1873 1874 1876 1876 1877 1878 1879 1880 1876-1880 1881 1882 188S 1884 1885 1881-1886 11,58 13,20 17,« 18,81 18,78 15,% W,io 18)00 17.82 17,40 17,82 17,04 17,64 17,88 14,40 12,90 15,06 16,60 17,64 IS. 72 20,58 18,-2 I'HO 18,60 1^>26 18.06 22,2G 21,12 20,68 20,20 20,80 211.12 19,08 ]9,:» 20,06 18,88 20,ss 21,10 18,.i2 18,43 17,68 18,30 100,0 89,7 102,j 136,3. 146,01 1*5,5, 123,7, 109,3( 139,6! 138,u 134,88 138, 10. "White Beans. M.per 100 ',14 1,32,( 136,; 138,f 111,6 100,0 116,7 120,0 146,12 169,53 145,12 134,88 144,15 141,55 146,18 172,50 163>72 160,31 167,05 101.2, 155,97 147,91 l«l.o2 155,50 164, 161,9, 1S3,5; 142,-, 142,8 137:0 149,0 27,2- 22,g. 24,„ 24,5, 26,2, 25,26 24«e 21,84 23,16 26,76 24,30 25,92 25,56 27,18 24,12 27,36 24,38 24,82 28,80 26,74 23,76 26,70 23,00 26,36 22,32 24,30 26,53 24,30 26,12 24,81 26,19 24,67 23,02 24,88 Propor- tionate Numbers, 100, ,26 126,1 124,2, 162, 131,3, 1,56,2 137,8: 128,21 107,9, 112,9! 115,54 118,64 11.' Potatoes. M.per 100 kg. Propor- tionate Numbers, 12. Hops. M.per 100 Propor- tionate Numbers. 13. Clover Seed. M.per 100 kg. Propor- tionate Numbers, 116,67 118,93 115,25 102,82 109,0, 125,99 114,41 122j03 120,34 127,97 113,56 128,81 122,60 114,78 110,,, 136,59 126,89 111,86 121,00 108,29 118,10 106,08 114,(1 124,91 114,41 122,9, 116,81 118,60 116,15 111,21 IIV,,, 6,92 7,16 4,16 6,u 7,62 485 4,79 5-19 5.25 6,54 5,54 liOi 5,94 5,65 5,62 5,96 C.72 7-70 7,46 7,90 7,7» ',37 100,M 82,1, 89,3 116,5 124,e 129,0 108,2, 130,9! 95,5c 66,4! 74,9. 110,05 95,68 137,30 87,39 99,82 99,82 126,85 107kb 101,80 101,26 107,39 113,51 11^92 118,7, 128,83 119.82 120,00 121,08 138,74 134,41 142,34 140,18 135,33 112.61 91,17 110,81 101,62 98,56 102,88 89,76 134,40 151,20 196,08 282,12 196,08 125,82 129,78 119,18 167,8, 198,9, 153,5, 203,1c 232,8c 253,3., 326,76 261,72 185,10 164,40 186,48 224,88 288,00 2'!0,98 2.S3,2, 382,14 289,06 304,88 278,22 262,0, 196,54 240,88 234,72 240,28 229,41 370,50 484,23 312,77 218,11 319,00 100,0 149,7 168,4 218,4, 314,3, 241, ,24 218,4 140,1 144,5 132,7 186,2, 332,31 187«, 221,5< 171,06 232,15 364,04 291,58 206,22 183,16 207,75 250,58 320,86 Ol3:03 315,55 ■125,73 322,04 "39,44 309,96 280,79 217,85 268,36 261,50 267,69 266,58 412,77 617,19 348,45 242,99 355,39 6.5,2 73,6 86,7 97,1 109,3, 112,4, 96,8, 125,1, 116,4i 110,58 119,6, 109,41 ',22 116, 104,40 98,88 96,52 93,72 133,32 105,18 127,56 145,80 115,40 98,88 116,56 120,68 131,54 122-:, 102,34 108,20 112,64 116,50 136,80 139,40 111,64 102,54 105,95 103,01 130,7, 113,38 101,4, 109,5. 100,0 112,9 132,9 148,9 167,6, 172,* 1470, 191,8, 178,61 169,55 183, 167, 14. Kape Seed. M.per 100 kg. Propor- tionate Numbers. 16. Kape Seed Oil. M.per 100 Propor- tionate Numbers. 16. Linseed Oil. M.per 100 kg. 25,9 ',49 178,, ,61 160, 151 146,46 143,70 204,42 161,27 195,58 223,55 lVfi„„ 161,61 177,18 185,00 201,69 188,19 156,92 165,90 172,7, 177,09 209,75 213,74 171,17 1,57„.2 162,45 182,86 161,85 168, 200,5, 173,8. 165,5. ',91 168,12 33,1s 29,5! 31,6! 30,42 36,22 31,20 31,82 3.3,60 32,40 30,18 29.62 27„2 31,32 34,86 30,72 36,74 31.78 28.^)4 26,60 29,06 31,2s 33,15 29,3, 26,54 23,96 29.50 30,85 2+,81 -3,39 27.„„ 'KtS 100,0, 84,9. 91,9, 110,65 114,12 165,!,7 113,43 140,9, 128^,1 124,77 102,78 113,89 121,99 117,36 135,88 120,37 121,99 129,6 126,0 116,4, 115, 106,79 120,83 134^9 118,52 141,74 122,62 108,18 98,77 112,u 116,67 120,45 127,76 113,12 102,39 92,44 111.23 107,80 113,89 119,02 96,72 90,24 100,32 72.5. 83.8! 106,8( 77.7, 96.58 96,30 80^,4 71,58 79,80 84,66 76,44 89,88 85,14 79,38 84,8, 72,36 66,00 66,64 70,24 88,58 74,50 67,74 69,48 67,40 66,54 68,62 58.13 71,58 64.27 54,09 61,34 100,„ 87,4- 91,81 93,9, 115,55 W7,3i 107,20 131,78 332,75 110,34 98,68 110,01 116,71 68,3 106, 123, 117,, 109,, 114,1 Propor- tionate Numbers, 114, 1,14 116,7, 99-75 90,98 96,78 122,83 105, 111,! 103,1 '0,01 91.3 90.4 94,54 102.70 93.S8 81,97 79,13 80,8 80,1 74,57 8*,86 78,4, 79.8, 64,s[ 59,88 69,58 65,1, 79,20 86,22 76,32 70,44 75,48 80,16 77,04 69,18 64,62 66,66 71.52 70.10 72.22 69,96 6-3,23 53,80 65,88 56.16 61.60 69.10 67.84 60,05 68,95 68h,6 54,81 49,93 46,01 100,0 66,42 113,77 60,42 103,49 61,56 106,45 76,60 129,50 80„o 137,20 117,8 134,3, 136,6! 110,2s 102,5; 102,06 117.16 111,51 136,66 147.69 130,73 120.66 129,29 137,31 131,96 118,50 110,69 114,18 122, 120,09 123,7, 119.84 108.39 92.15 112,85 96,20 106,52 101,23 99,08 102,86 100.98 99,45 93.88 86.53 78.81 84.87 * For these Articles tlie wholesale prioe paid b.y APPENDIX. 225 imixl:;^— :"*■ """"' "*" "" """''°** '""»"'"•'• "•■"">•" •"»"«■■» •» ««-. App. XVI. I.— AeEICULTURAL EaODUCE— COJlW»«ed. 17. Oilcake. 18. Raw Suftai'. M.per Propor- M.per 100 ' tionate 100 kg. Numbers, kg. 12^ 13,86 10,-4 13x)s 13,1. 13,E 11.82 10,66 12,« 10,62 13,26 12,M Hmo 15,12 12,f» 12,60 13.90 15.78 10,32 11.6. 15,10 17.36 15o8 14.82 16H)3 •'''9.48 «S,75 /»^84 «',46 •'«tf.80 «0,12 -Him /«(i,48 •'24.46 ^5^,23 '44,17 •'50.99 '44,90 '4-',05 -'4.5,34 -/3«,50 «2,92 ■138,11 ■I37,M ■)3S,iB ^43,33 -12:1,1:-, ■l■lo,^!, 130,-n M. per 9Qm 0, "0,71 0, '2*,18 0, '50,49 0,6 •'«*,82 0,7 0,65 0,76 0.72 0,72 0,65 0,62 0.69 0,79 0,77 0,80 0,88 0,<,6 1.02 0.98 1,00 1.00 1,23 1.25 1.245 1,14 1,21 1.22 1.09 1.18 1.19 l.,r, I, II.— Aotmal Pboduoe. Propor- tionate Numbers. Veal. Propor- tionate Numbers. 80,5, 86,1, 90,28 109,72 90,28 105,56 100,00 100,00 90,28 86,11 95,83 96,83 109,72 106,94 111,11 122,22 109,72 133,33 141.67 136,11 138,89 138,89 137,50 150,00 152,78 169.44 165,28 162,50 159,72 170,83 173,61 172,92 168,33 168,06 169,44 161,39 163,89 165,28 161,11 150,„o 158,33 1.04 1.04 1.07 1,05 1j02 1,11 1.24 1.24 1.38 1.205 1.24 l.M 1.62 1.45 1,38 1.41 1,« 1.47 1,51 1.52 1.50 23.' Mutton. M. per kg. Propor- tionate Numbers. Years. 100,0 80,4 79k, 88,81 91,3, 106,1; 102,4 101,z 101,2, 91,3, 88,8! 97,5! 91,3< 101,25 97,« 102,4, 125,93 103„c 128,4< 128,« 132,ic 129.63 125,93 128,40 137,04 1.18 153,09 1.49 153,09 1,08 170,37 1.22 148,77 1.3. 163,0, 177,7. 187,6, 179,0, 170,3, 174,„ 177,7 180,2 181,4 186rt 187,6 186,1, 0,95 0,95 0.95 0-95 0,95 1,52 1,49 1,45 1.40 1.43 100,00 102,15 102,15 102,15 102,15 102,15 102,15 102,15 102,15 102,15 11)2,15 102,15 102,15 i«;i.i5 112,90 213,98 113,98 99,25 106,45 107,50 106,45 108,60 112,90 119,3 110,75 126,88 160,22 116,13 131.18 140,86 135,41 163,44 160,22 165,91 160,54 153,76 156,99 155,91 162,37 174,19 166,99 141,94 158-16 1847-1860 1861 1852 1853 1854 1865 1851-1855 1866 1867 1858 1869 1860 1856-1860 1861 1862 1863 1864 1865 1861-1866 1866 1867 1868 1869 1870 1866-1870 1871 1872 1873 1874 1876 1871-1875 1876 1877 1878 1879 1880 1876-1880 1881 1882 1883 1884 1886 1881-1886 tlie Hamburg Government is taken as a basis, o .54648. F f 226 ROYAL COMMISSION ON GOLD AND SILVER: API' XVI AvB RAGE PpicE of 100 ARTICLES of Trade in Hambukg duiiiig the Period from 1851-1886 as compared with by the Hamburg Bureau AiriMAL 'Paoj>vCB—contitmed U. 26. 26. 27. 28. 29. 30. 31. years. Pork. Milk. Butter. Cheese. Tallow. Suet. Hides. Calfskin. M.per kg. Propor- tionate Numbers. M.per Liter. Propor- tionate Numbers. M.per 100 kg. Propor- tionate Numbers. M.per 100 kg. Propor- tionate Numbers. M.per 100 kg. Propor- tionate Numbers M.per 100 kg. Propor- tionate Numbers M.pe, 100 kg. Propor- tionate Numbers M.per Propor- 100 tionate kg. Numbers 18-1,7-1860 0,86 100,00 0,07 100,00 1,20 100,00 79,63 100,00 82,14 100«) 93,12 100,00 83,35 100,00 156,00 100,00 1851 0,99 116,12 0<,67 95,7, 1.22 101,67 78,« 98,52 70,20 86,46 100,62 108,05 89,39 107,25 162,«, 104,23 1863 0,99 115,12 0,067 95,71 1,22 101,07 82,20 103,16 78,18 95,18 106,38 114,24 81,21 101,03 139,38 89,35 1863 0,89 116,12 0,067 96,71 1,54 128,33 91,92 115,36 97,68 118,92 115,20 123,71 102,66 123,17 167,10 107,12 1864. 0,99 116,12 0,067 96,71 1.67 189,1, 101,58 127,48 118,20 143,90 116,22 124,81 109,17 130,98 211,44 136,5, 1865 1,10 127,91 0,067 95y7i 1,74 145,00 107,« 134,70 108,18 131,70 117,00 125,6. 112,51 134,99 203,46 130,42 1861-1866 1,M 120,93 0,07 100,00 1,45 120,83 92,28 116,81 94,50 115,05 111,06 119,27 97,68 117,19 176,82 113,35 1866 1,06 123,26 0,067 96,71 1,93 160,83 104,52 131,17 103,68 126,22 121,92 130,93 129,02 164,7, 2.39,58 163.58 1857 1«1 117,44 Ok»7 96,71 1.86 155,00 108,66 136,37 108,60 132,21 126„8 13650 173,21 207,81 294,06 188,50 1858 0,95 111,63 0«67 95,71 1,95 162,60 104,46 131,10 96,70 116,5, 104,76 112,50 118,08 141,07 207,00 132,69 1859 0,90 104,65 0k)67 96,71 1,84 153,33 103,50 129,89 106,78 128,78 103,56 111-2, 134,79 161,72 280,74 179,96 1860 0,91 109,30 0«67 96,71 1.99 165,83 107,76 135,24, 107,22 130,53 112,98 121,33 143k,9 171,67 313,08 200,69 1856-1860 0,97 112,79 0«7 ,100,00 1.91 169,17 106,78 132,76 104,22 126,88 113,58 122,2, 142,50 170,97 266,88 171,08 1861 0,94 109,30 0,06 1 86,71 1.71 142,50 98,92 124.i5 102,96 125,35 107,16 116,08 120„2 144,12 239,82 163,73 1862 1kI5 122k,9 0,07 100«o 1,66 138,33 98,10 123,12 92,82 113,00 88,86 95,43 116,62 138,;2 223,00 144,23 1863 1,05 122,„ 0,06 86,71 i,56 130,00 108,30 135,92 82,14 lOO.ot, 75.78 81,33 103,18 123,;, 2511-32 160„6 1861 1,05 122,09 0,06 85,71 1,80 160,„„ 103,02 12929 78,36 96,40 97.56 104,77 106,34 127,58 275,28 17(l-,6 1865 1,05 122,0, 0,11 157,14 1,95 162,50 106,« 132,38. 83,10 101,17 134,46 144,39 99,60 119,50 265,98 170,50 1861-1866 1,03 119.77 0,o; 100,K, 1.74 145«o 102,72 12S.J3 87,90 107,01 100,74 108,18 108,97 130,74 251,28 161,08 1866 0,97 112,70 0,10 142,86 1.91 169,17 111,18 139,53 82,38 100,2, 118,80 127,58 99,48 119,35 243,30 15-5 M 1867 0,93 108,14 0.10 142,86 1.76 146,67 114,96 144,28 93,3. 112,42 104,10 111.79 103,38 124,K, 250,56 160,62 1868 1,01 117,4. 0,11 157,14 2,17 180,83 109,02 136,82 89,70 109,20 124,02 133,18 115,80 138,93 257,10 164,81 1869 1,12 1311,23 0,11 157,1, 2,14 178,33 115,58 146,18 89„„ 108,84 129.72 139,30 106,00 12.1„7 249,00 169,62 1870 1)05 122,09 0,10 142,86 1,88 166,67 110,16 138,25 88,56 107,83 126,16 184,41 112,38 134,83 249,24 159,77 1866-1870 1,02 118,60 0,10 142,66 1,97 164,17 112.20 140,81 88,50 107,74 120,36 129,25 107,22 128,64 240,84 160,15 1871 0,93 108,14 0,10 142,86 2,04 170,00 114,20 143,32 87,90 107,01 102,50 110-07 129,96 155„2 267,22 171,29 1872 1.07 124,42 0,12 171,« 1.99 165,83 128,.,„ 161,1, 86,50 105,31 80,82 86,7, 161,56 181,84 i00,i6 192„i 1873 1.18 137,2, 0,12 171,43 2,28 190,„„ 12S.:,2 161,05 81-22 102,53 86..52 92..1, 156,48 187,7, 298,« 191,32 1874 1,095 127,33 0,12 171,43 2.59 216,83 12«,s, 169„8 82,46 100,39 106,96 11.3,-9 148,72 178,43 270,70 173,53 1876 1.17 136,05 0,14 200,„„ 2,40 200,00 137..,,-, 160,0, 87k,2 106,95 122„8 131,21 136,28 16.3.50 210-56 16-1,21 1871-1875 1.09 126,74 0,12 171,43 2,26 188,33 126,,,,; 160,95 85,62 104,24 99,60 106,96 14-1,60 173.49 276-.,2 1711-55 1876 1k)9 126,74 0,13 186,7, 2,6, 217,50 128,28 160.99 87,92 107,04 111,80 120-„n 111 -co 133,89 193,36 123,95 1877 1.10 127,91 0,14 200,00 2,34 105,„„ 139,0, 174.50 85,92 104,60 97,92 106,15 112,94 135,50 175,58 112,55 1878 1«2 118,60 0,14 200,00 2,19 182,50 123,16 164,57 81,70 99,46 7S«4 83,8, 104,68 125,5, 161,00 103,2, 1879 1,00 110,28 0,13 186,7, 2,02 168,33 116,90 146,53 70,98 86,4, 72,7, 78,11 104,24 126,06 176,73 112,68 1880 1.14 132,56 0.1= 171,43 2,32 193,33 120,25 im.,. 69,60 84,73 84,08 90,29 116,90 140,25 212.43 136„7 1876-1880. 1.07 124,42 0.13 186,7, 2,30 191,67 126,34 167,30 79,22 96,45 88,92 96,49 110,07 132,06 183,61 117,70 1881 1.M 144,19 0,12 171,43 ; 2,41 200,83 122,42 163,64 73,83 89,88 112,12 120,40 119,23 143,05 196,65 125,42 1882 1,16 134,88 0,12 1V1,43 2,40 200,00 114,18 143,30 87,0. 105,97 116,72 ns,^ 116,82 140,16 196,63 126,04 1883 1,09 126,74 0,12 171,43 2,30 191,67 117,74 147,77 89,81 109,34 98,„ 106,28 117,14 140.54 194,80 124,87 1884 1.01 117,41 0.12 171,43 2,28 190,00 114,92 144,23 75,88 92,38 80,25 86,18 117,26 140,68 188,K 120,92 1885 1.01 117,4. 0,12 171^3 2,u 176,67 103,77 130,23 69,81 84i99 67,95 72,97 117,80 141,33 190,32 122«, 1881-1886 1.10 127,91 0,12 171,43 2,30 191,67 114,6, 1'13,84 79,27 96,50 96,80 102.J, 117,65 M1.15 193,2, 123,85 * "For lliese .-iii icips the v,- iioicsnii- price pnid APPENDIX. 22? X:rz!r.^z:^:''"'' "^"" * "■ ""'■»"*- ■■"'-^•"- -'-""- -->.« - «...-. App. XVI. Animal PRo-DucE—contimied. 32. Leather. Vl.per 100 kg. Propor- tionate Nniubers. Horsehair. M.per 100 kg. Propor- tionate Nuinbors, ■•263.« r'.Oi.ai I :53S,i; 316.90 .9; 370,„ 437„i 4,10,sj 370,22 405,a .73 437,41 m^ 110.M 485,13 354,31 293,99 oo5>ii 339,13 361^ 3C3,5, 334,™ 305,74 i312..» |300,6B 260, 264,s 301,s 289« 314,j 318,3. 360,1; 371,1, 100Kr7 >,M 119,23 151,00 165^3 34. Bristles. II .per 1(10 354.«; 412,62 42e«, 494.32 625,56 486,16 489, 422,16 484« 110..S Ui^H 150,69 448,50 144.97 Propor- tionate Niimbors 35. Feathers tor Beds. M.per 100 150,48 123-11 122,33 125,20 116^3 634,0-2 486,54 466,62 372,06 532,.-,2 109,59 J503.64 119,34 47l)„o 98,42 553,18 124,46 '.501.«i 134,85 423,48 158,96 '4t2,«, 149,76 U9.V, 133,29 !494.„, 197,65 566,10 163,45 164,53 131,63 144,90 158,43 114,78 98,17 730,92 819,«, 725,42 734,14 716,10 767,10 730,12 94,50 843,28 89,83 704,28 770,40 723,04 104,8! 100,,; 96,4( 119,51 133,0£ 135,5i 125,24 121,96 762,94 810,52 824,99 852,21 748,59 799,85 100,0 116,54 174,18 120,33 186',22 139,76 176,68 187k>3 186,5. 168,2. 188,7, 138,1 119,^ 136,9, 125,i; 126.6 179, '«7 160,5, 180,6 184k,; 180,„ 175,2, 178,3, 164,2, 137rf2 134,30 131,79 105«8 150,52 142,25 132,79 156,80 141,52 119,61 124,98 156,31 139,64 159,61 206,44 231,57 204,89 207,35 298,36 201,97 24,3,46 216,66 266,10 212,32 190,33 210,11 191,51 214,08 185,96 162,03 178,74 173,79 161,61 172,43 176,40 165,72 175,08 165,30 156,54 172,44 167« 174,18 178,32 185,82 217,14 184,80 211,56 216,72 246,52 245,10 206,21 181,89 198,92 217.S, 204,21 216,-18 228,92 233,01 240,70 211,-B 225,91 Piopor- ticnate Numbers .'ii;. Bones. M.per 100 kK. 100,00 108,52 116,40 116.22 104,83 117,61 112.52 114,65 112,15 109,20 111,10 102,36 109,91 103,25 109«8 102,99 97,53 107,41 104,07 108, 104, 111, 115,, 136,, 115,14 131,81 135kb 152,97 152,73 185,89 151,69 165,79 132,29 118,58 130,93 119,3d 133,36 115,86 100,95 111,36 108,28 100,69 107,43 7,98 8,40 8,58 9,24 9,54 10.86 9,30 10,68 11,22 10,38 10,74 9,18 10,41 9,54 9,51 9,8 9,6, 9,-5, Propor- tionate Numbers. 9,96 10,14 9,06 11,76 12,36 10,68 12,02 13,01 12,78 14,06 15,50 13,48 13,18 12,80 12,14 10,22 11,26 11,98 11,35 12,8, 13,58 12,36 10,21 12,06 100,00 .105,26 107,52 115,79 119,55 136,09 116,54 133,83 140,60 130,03 134,59 115,04 130,83 119,55 119,55 123,31 121,05 119,55 120,30 124,81 127«7 113,53 147,37 154,89 37. Buffalo Horns. M.per 100 kg. 73,20 133,83 78,87 40,80 61,42 65,80 67,24 62,26 42,72 61,90 47,01 68,92 69,81 72,42 82,26 66,12 70,62 64,80 64,44 69,52 Propor- tionate Numbers. W,24 150,63 163,41 84,22 160,15 176,19 194,21 168,92 165,92 160,40 152,13 128,07 141,10 150,13 M2«3 160«, 17«,18 164,89 127m 151,13 96,26 64,61 74,94 78,62 77,90 118,88 91,24 ,116,M 105,63 86,36 86,87 86,58 38. Glue. IW.per I 100 Propor- tionate Numbers. 100,00 126™ 136,76 140,29 128,09 104,71 127,21 115,29 144,41 126,94 171,18 122,34 177,50 106*8 201,62 162,06 173,09 158,82 157,94 146,83 168,38 160,88 174,26 203,97 173,38 235,49 179,41 193,31 75,18 74,58 72,60 7.3,08 85,74 95,76 80,34 88,80 97,62 108,18 105,78 96,16 91,56 87,30 ■82,26 87,72 126,42 9.81 96,96 169,71 107,92 206.42 138,88 168.43 139,60 183 206, 126,64 116,72 184,90 125,96 203,91 240,25 192,70 190,93 291,37 223,63 286,37 258,90 211,67 212,92 209,75 108,02 235,9, 102,95 102,52 91,64 87,14 91'«3 96,81 93,8? 104,30 103,78 105,66 100,60 99,20 96,57 97,21 114,05 327,37 106,86 EgRI,.* M.iier 100 kg. Propor- tionate ?^umbers. . Years. 118,12 167,52 182,73 141,10 129,85 143,89 140,70 126,58 121,79 116,12 119,15 124,90 117,61 109,42 116,68 168,16 133,80 128,97 143,55 184,73 186,69 168,45 155,25 167,54 136,37 121,89 116,31 121,07 128,77 124,89 138,73 138,04 140,54 143,68 136,94 5,42 6,2S 5)37 B,I7 5)33 5j65 6.30 5)33 5..36 5,18 100,0c 123,2a 123,28 123,28 123,26 123,28 123,28 123,28 123,28 123,28 123.28 123,28 123,28 123,28 138,79 132rf7 136,21 120,69 130,17 126,15 119,83 125,86 129,e50 40,98 136, 62,20 172, 49,38 163, 45,00 148, 6.3,94 178 53,04 41,94 43,98 52,20 48,84 48,™ 60^2 46,94 52,88 61,94 44,38 49,38 66,12 62,54 51,28 168„ 176,, 180,1 169, 144,11 165,8 ',,16 47,9! 57,51 62,o> 67,2, 62,,i 100,00 85,24 103,1, 109,92 122,62 133,73 112.90 124,40 146,63 127,98 143,06 130,16 134,52 77 69,48 78,66 94,44 118,59 90,80 169, 175,40 138,69 145,44 172,62 161,51 158,73 167,72 155,22 174,87 171,76 146,76 163,29 186,58 178,74 169,58 161,79 129„3 162, 158,47 190,15 208,16 189,35 174,5.1 79,48 131, 81,45 134, 71,u 117, 72,46 119, 79,12 130 76,3 71,16 117,74 74,62 123,46 67,31 111,37 66,04 109,27 66,90 110,69 184, 65,17 62,97 67,77 60,98 49,37 67,06 61,36 67,39 72,64 60,61 50,49 100,00 119,14 118,50 119.52 126,14 147,55 126,36 147,19 148.41 120,90 116,28 112,03 128,41 114«i 130,18 156,25 196,21 150,23 154,62 114,41 107,83 104,19 96,68 84.35 81)68 94.,: 101.5; 111,5, 120,1, 100,2 63,5 103« 21-42. Total. //0,38 io6,m •'«S,54 ■/■H,7S •'40,18 ys2,3i •? 24,79 '87,19 ^24,12 •'«9,!1 ^2S,24 •/«5,64 «2,68 •'3»,48 ^39,32 ■'44,14 ^55,82 /5tf,72 /57,76 ■>H,n ^■58,51 •'4-'.53 •'37,60 ■'47,30 ■ U6m «/,21 ■'55.17 y56.4o ■'50,26 ^40,41 «0,65 III.— Foreign Fruits. 43.; Eaisins. M.per 100 kg- Propor- tionate Numbers. 44. Dried Currants. M.per 100 kg. Propor- tionate Numbers. 46. Almonds. M.per 100 kg. Propor- tionate Numbers. 46. Dried Plums. M.per 100 kg. Propor- tionate Numbers *2,72 35,58 34,20 52,80 55kb 61,72 46,90 81,24 94,38 62.34 58,86 64,72 70,32 52.62 61,00 64,90 49,56 47,88 61,18 63,84 60,54 50,64 45,00 58,26 65,68 53,68 52,14 67,92 60,38 66,56 68,14 65,24 47,72 37,12 47,54 64,83 4fi,49 62,36 68,76 48,61 41,14 61.02 62,38 10O.a 123.60 128,93 121,07 107.44 190.17 220,93 146,93 137,78 128rt» 164,61 123,1, 119,38 128.51 116«i 11276 1876 71, 1877 78, 1878 88, 1879 96, 1880 85, 1876-1880 1881 1882 1883 1884 1885 1881-1886 91,0. 78.„ 62,v; 51,7( 100, 106,18 104,88 116,51 112.71 103,58 108„8 95,90 86,09 62,7, 63,51 67,4! 76,1, 68,2e 60,2, 53,9c 47,5S 61,24 64,23 60,33 40,96 46,23 46,32 46,32 46,64 60,2, 67, i( 66,01 60,4i 77,2, 86,22 171,78 202,02 219,00 232,44 227,40 223,86 220.92 204,36 254,46 194,40 163,88 179,91 199,32 176,34 170,94 180,72 172«8 171,54 174,80 193,18 204,60 260,70 234,18 224,10 213,04 179,58 156„j4 132,36 112,82 158,74 102,50 99,80 85,90 92,87 76,68 90,92 89,33 98,71 86,33 84,60 74,57 68,02 68,67 60,07 63,67 63,31 54,40 72,14 69,33 100,00 117,60 127,49 136,31 132,38 130,32 128,61 118,97 148,13 113,17 96,11 104,75 116,03 102,65 99,51 106,20 100,17 99,80 101,, 47 111,83 119,11 1S3,,5 161„6 136,33 130,46 124,02 104,54 90,78 77,05 65,68 92,41 69,67 58,10 50,01 48,19 52,00 49,67 43,41 39,98 37,06 31,67 40,30 33,6, 27„i 23,4< 31,6i 28.9! 32,5. 24,66 23,34 22,92 22,98 24,78 23,76 22,74 23,88 23,58 19,20 21,96 22,26 22„6 22j82 23,02 19,30 21,58 19,88 21,22 22„,2 21.02 19,82 20,b: 19,7! 17,8., 19,25 18.44 17,3, 18,53 100,00 80,75 69,52 94,12 85,92 96,79 S5,38 74,87 73,38 60,07 65,60 72,73 69,52 73,26 69,34 68,09 68,27 73,62 70,59 67,56 70,94 70,05 57,04 66,24 66,13 66,43 67,80 60,67 68,39 67,34 64,11 S9,„6 63,04 66,61 62.45 58,88 62,00 58,67 53,00 67,19 64,78 51,00 46,01 40.OJ 53,22 51.66 39,96 39,84 41,22 46,18 41,22 47,22 43,08 46,24 41,28 43,62 37,74 38,16 43,92 43,56 37,32 46,14 36,20 36,34 ■!7,;,2 40,52 38,32 37,78 36,14 39,68 37,8 26,7 66,1 100,„ 92,8e 80,75 97.58 95.28 107,36 107, 104,; 80„ 80,; 83,1 M.per 100 Propor- tionate Numbers. 69. Rum. M.per 100 kg. Propor- tionate Numbers. 60. Tobacco. M.per 100 kg. Propor- tionate Numbers 91,1 8.3,1 96,2 80,9; 91,K 00,01 V6,is 77,00 88,62 87,89 75,30 80,90 73,04 73,33 75,71 81.-6 77,32 76,23 72,92 80,06 8i.63 82,36 74,41 78,91 76,41 68,16 69,32 63,93 67,65 63,10 66,8i 64,6, 81,6C 79,2, 63,34 45,12 46,26 61,14 66,22 48,30 61,68 61,38 66,82 60,96 67,80 76,26 69,90 65,94 60,48 64,96 70,74 88,00 84,38 71.72 86,86 87,94 76.70 68,2, 66,6: 67,8; 100,00 96,51 94,11 113,91 129,57 167,31 120,31 163,46 158,77 106,65 90,38 92,67 122,48 112,62 96,75 123,56 122,96 113,8; 62,14 62,38 49,02 66,ia 70,20 77.16 63,00 72,18 113,94 109,62 122.12 135,8i 162,76 140,02 132,09 121,15 110,10 141,71 176,29 169,03 143,67 174,00 176,16 163,65 116,59 183,55 160,78 116,71 184,84 96,17 148,08 134,98 71,5! 74,1, 73,K 71,10 58,38 60,42 78,48 68,04 67,26 70,86 73,14 81,36 89,40 92,94 81,61 81,78 89,52 100,56 106,56 96,58 94,80 104,28 108,82 103,08 98,22 107,49 104,38 111,32 104,47 112,0,. 87,40 103,79 136; 103, ',80 IOOkk, 100,46 94,02 126,93 134,64 147,99 120,83 138,43 169,51 120,25 137,28 142,u 141,34 136,36 111,97 116,88 160,52 130,4 129,0 97,44 109,38 100,38 113,88 113,88 122,34 146,2, 166,3, 126,71 140,9, 144,1, 111, ,96 135,90 140,28 166,04 171«i 178.25 156.39 166.85 171,69 192,87 204,37 183,81 181,82 200,0, 208,71 197,70 188,38 206,16 200,1 213,5 200,3 214,8 ie7„j 199,0, 199,0, 142,2 162,j 172,4. 136,0, 135,3( 113,8S 144,06 104,52 116,04 122,04 139,80 134,94 139,30 164,02 148,32 148,22 142,64 148,48 147,92 141,78 134,64 126,84 136,45 137,61 130,42 116,29 112,26 123,54 126,41 121,18 100,00 112-25 103,ffij 116,87 116,87 125,55 114,90 149,08 159,42 129,00 114,61 147,97 146,00 167,06 176,97 139,5 138,8 116,8: 147,8, 107,2; 119,os 125,25 143,4; 138,4! 126,7, 142,9, 168,3. 162,2, 152,1, 146,3! 162,3, 61. Indigo. M.per 100 kg. Propor- tionate Numbers, 862,! 967,! 1026,c 1103,4 1064,76 1103; 151,83 145,60 138,07 130,17 140,03 141.12 183,85 119,36 116,20 126,79 128,70 124, w 1063, 1103,4 1316,4 1323,0 1326,1 1406,8 1294,9 1486,1 1628,6 1291,2, 1342,3, 1303,01 1410,31 1460,64 1469,74 1668,70 1734,12 1742,82 '.12 1693,1 1630,8 1617,8 1418x, 1476,1 1451,3 1518,8 1303,3 1314,3 1259,2 1246,7 1304,7 1286,( 1393,s 1362,s 1803,: 1223,s 1089,8 1274,5 100,0, 112,2! 118,9( 127,93 123,45 127,92 122, .10 127,93 152,63 153,39 153,63 163,11 160,14 172,31 188,83 149,70 165,64 151,08 163,51 169,35 109,25 181,88 201rt6 202,07 184,72 189,09 187,58 164«o 171,15 168,28 176,10 151,u 152,38 146«„ 144,55 161,27 148,06 161.51 167,95 161,10 141,90 126,35 147,77 APPENDIX. 231 the Average Prices from 1847-1850, together with the correspopdipg proportionate Numbers according to Returns of Trade Statistics — continued. App. XVI. IV.— Colonial Articles {notmc\aA[ngOoUon)— continued. Cochineal. M..per 100 Propor- tionate Numbers. ■6S Logwood. M.)>fv Propor- inO tionate kg. .Numbers. 6-1. Red Wood. M.per 100 kg. Propor- tionate Numbers, 66. Mahogany. M.per 100 kg. Propor- tionate Numbers Bamboos. M.per 100 kg. Propor- tionate Numbers, 67. Palm Oil. M.per 100 kg. Propor- tionate Numbers. 68. Ivory. M.per 100 kg. Propor- tionate Numbers. 60-68. Total. 102l!«i I S13.0O 79S,.,, 987.« 871,1, 874,58 851,88 Sl-2.70 786..H 6ia,jo .515.:;t i>07.3„ 72B.6, 753,30 650,« 797.J, |777,K 875,88 705,„ 630,12 757,„ 623,„ 553.28 567,1, 624,52 466,38 546,„ 508,„ 569,28 523,18 676.52 598,36 555,23 4.39,30 365,83 265,« 250,38 316,40 326,,, 100,00 79.2, 77,36 96,24 88.M 84,90 85,28 S3.„2 79,21 79,50 53.15 59.21 70.81 73,.„ 63,39 77,70 76«2 83,36 68,79 61„i 60,71 53,93 55,27 51,12 45,51 53,31 49,59 55,48 60,09 56,19 58,32 64,11 42,81 34,69 25,88 24,«, 30,8, 11.23 9.« 10«2 14.2S 15.72 13.;, 12,66 13,98 12.1S 10,32 10,98 12kk ll,S8 13,« 13,86 12,06 11,6. 12,36 12,66 13,38 10,62 1S,3S 15,42 13,02 13,1, 13,20 14,28 14.2, 13,18 16,.„ 14,26 16,58 14,82 13,76 14.5, 14,66 14,6: 13,71 14,l; 13,3! 13,* 12,6; IOOkx) 83,96 89,30 137.27 140,11 122,46 112,83 124,60 108, 91,9, 97,8( 107,4i 105,8 119,7 107rf! 103,74 110,16 ,56 24,78 24,42 25^4 24,9( 26,4< 112,8; 119,2: 94,e 119,2; 137,* 116k, 117,1 117,6 127,2 I'ili.J 117,4 146,1 '17 127«, 138,86 132,09 122,61 129,59 130,66 130,75 122,55 125,94 118,98 119,83 112,57 119,96 18,96 17,10 16,30 16,86 18,78 I7,5i 20rf, 21,7: 24,8, 21,3, 16,s 21«o 16,42 14hb 14,78 22,13 20,18 17,30 16,66 15,68 15,86 16,72 19,66 16,92 17,09 15,55 14,95 13,31 11,1, 14, ;,4i 100,o( 96«. 94,6; 102,56 97,67 103,02 131,40 89,77 97.91 84,42 IOImo 73,43 66,28 61,63 65,12 72,75 67,91 79kw 84,19 98,28 82,73 64,65 54,3, 57,29 85,74 78,22 67,05 64,57 60,78 61,47 64,81 76,20 65,58 66,24 60,27 67,95 61,59 43,18 55, 21,9( 25,20 25.20 24,„c 19,5( 23,88 28,02 20,58 23,76 27,12 24,66 28,« 10,32 27,72 41,58 27,96 28,02 19,86 15,96 14,88 22,32 19,86 20,70 27,18 26,78 22,32 20,22 23,24 22.70 21,7, 18,88 18,70 20,66 20,55 19,91 21,52 22,39 17,40 16,02 19,45 100,00 110,50 110,50 107,67 109,59 89,32 107,40 109,04 127,95 93,97 108,49 123, ',84 112,60 107,12 88,22 126,58 189,86 127,67 127,95 120,55 90,68 72,88 67,95 101,92 90,68 94,52 121,11 117,72 101,92 92,33 106,1 103,1 t',27 86,3 94,3 102,2 79„ 73,1 41,76 44,04 43^4 44,64 44,94 43,0 55,12 59,82 59,22 56,58 64,74 50,56 62,60 49,24 47,54 64,73 60,93 56,47 56,42 66,09 51,42 53,27 64,53 100,00 66,46 106,01 66,82 106,23 58,38 116,47 72,60 101.94 96,88 106,59 85,74 107,17 73,86 116,28 81,60 172,29 89,22 168,72 76,32 133,72 83,46 121,30 80.46 140,50 82.20 119,38 81,12 136,43 75,54 172,«, 64,32 188,76 72,36 172,87 72,2, 167,95 73,14 164,i; 134,8, 142,2 140,3 144,1, 178,0, 193,22 191,28 182,75 176,81 163,31 169,90 169,04 163,55 176,78 164,50 179,17 182,24 181,17 166,09 1172,06 176, 77,« 80,16 82,08 83,04 79,08 80,34 103«8 76,10 74,24 70,80 70,30 78,90 73,96 77,72 77,36 68,66 72.58 63»o4 63,6* 69,15 65,90 54,54 63,25 100,0 86,8; 89,1, 110,9 146,4 130,9 112,8 124, 136,3, 116,5, 127,5, 122,3 ,,66 125,5, 123,9! 116,3( 98,2( 110,5, 110,3, ni„ 118,2 122,4 126)3 126,8 120,6 122,; 173 167,47 116,25 113,41 108,16 107,39 120,53 112,99 118,73 118,18 104,89 99,59 110,88 96,30 97,22 105,64 100,67 96,6, 919,2 909,7 975,1 1122,6 1218.3 1335,8 1112,4 1393,8 1648,3 1439,1 1391,1 1372,2 1443,c 1223,1 1257,: 1240,, 1503,2, 1280, 1300,98 1411,e 1349,7 1343,4 1351,1 1364,1 1364«, 1273,34 1510,88 1878,20 1819,66 2021,96 1700,80 1897, 1776, 1852; 1630.90 1496, 1710,64 1616.5, 1748.7 1858,1, 1920,6, 1790,4 1786,7 5,97 ',13 100,0 98,, 106,, 122, 132,60 146,32 121,02 161,63 179,32 156.55 151,33 149,28 157.02 133.06 136,go 134,99 163,53 139,25 141,52 153,56 146,83 146,15 146,98 148,40 143,38 138,52 164,36 204,32 197.95 219,35 185,02 206,45 193,16 201,56 166,54 162.7, 186,09 175,7, 190,24 202,13 208.,,, 194,77 194,36 ■lOOm 99m 99-S5 ^^5,28 •'23,95 ■^40,33 ■/■fs,n «2,6l •?-/7,i9 ^85,74 ■n6ni y»2,io <»,56 •'30,25 ^3(5,74 •'30,72 fSOm •'2.5,61 •'23,3, •'20,17 ^^7,90 ^^(!,39 ^'*91 Years. 1847-1850 1851 1852 1853 1854 1865 1856 1857 1858 1869 1860 1856-1860 1861 1862 1863 1864 1865 1861-1866 1866 1867 1868 1869 1870 1866-1870 1871 1872 1873 1874 1875 1871-1875 1876 1877 1878 1879 1880 1876-1880 1881 1882 1883 1884 1886 1881-1886 232 KOYAL COMMISSION ON GOLD AND SILVEK : Ai'P. XVI. Average Price of 100 Articles of Trade in Hamburg during the Period from ]861-1885 as compared by the Hamfjurg Bureau years. v.— Mineral Peoduce. 63. Ht Coal. M.per 100 kg. Propor- tionate Numbers, 70. Pig Iron. M.per 100 kg. Propor- tionate Numbers. 71. Wrought Iron. M.per 100 kg. Propor- tionate Numbers. 72. Steel. M.per 100 kg. Propor- tionate Numbers. 73. Lead. M.per 100 kg. Propor- tionate Numbers. 74 Zinc. M.per 100 kg. Propor- tionate Numbers. 1847-1860 15,73 1861 13.S1 1862 13,78 1868 17,91 1864 20,65 1885 19,00 1851-1866 1856 1867 1868 1869 1860 1856-1860 1801 1862 1863 1864 1865 1866 1E67 1868 18^9 1870 ■ lNi;r>1870 13?1 1872 1873 1874 1875 16,9 18,75 17,97 15,78 16,63 15,18 ie,65 15,93 16,03 15,08 16,11 16,35 13,51 16,31 16,02 13,58 16.13 16.10 16,00 16,55 21,73 27,46 22,1, 18,07 1871-1875 20,05 1876 16,50 1877 16,ffl 1878 13,05 1879 13,10 1880 13,10 1876-1880 14.U5 1881 12,67 1832 12,06 18.53 12,05 1834 12,52 1886 12,31 1881-1885 12,S6 100,00 87,79 87,60 113,80 131,28 120,79 107„6 119,39 100,32 106,85 101,27 101,91 96,87 102,« 103,94 Hll.u 103,6, 101,84 99,05 96,19 96,38 99,1, 98,86 138,14 174,57 140,94 114,88 331,28 106,28 97,90 88jB8 83,60 91,23 80,55 80,48 80,42 79:9 78,26 79,85 b,84 7,26 12,5^ 14,36 10,26 6,7J 6,54 6,78 6.94 6,20 6,96 100,a 7S,o( 78,2j 106,45 140,32 127,42 106,65 123,39 118,55 92,74 87,90 87,90 102,42 83,00 84,68 83,55 95,16 93,55 90,32 ; I n 97,5, 168,5, 193,0, 137,91 110,2, 141,40 108,60 96,51 86,02 87.go 91,13 79,84 16 83,33 17, 80,11 16, 77,55 16, 69,09 14, 19j8i 16,» 16,6, 22,2, 26,3, 22,,, 20,5i 24,12 24,06 20,28 20,28 19,50 18,4, 18,8, 19,5, 22,u 21,5, 20,K 21,00 20,22 18,72 18,54 19,68 21,32 27,60 34,24 22,48 23,62 26,80 20,52 18,72 17,48 16,76 16,55 17,81 77,96 15,87 100,00 80,91 83,94 112,12 128,18 1M,8S 103,94 121,82 121,21 102,42 102,42 109,39 93,03 9.3,15 98,48 111,82 108,79 101,52 106,06 102,12 94,55 93,64 89,39 107,68 139,39 172,98 113,54 119,29 130,61 103,64 94,55 88,28 70,60 83,59 89,95 80,86 Sojyg 83,37 76,67 72,02 70,„ 68,1, B6,2( 62,58 67,56 58,62 58,50 61,90 47,52 «,oo 48,54 67,12 45,12 39,62 53,30 64,42 48,20 46,06 37,66 37,77 44,88 37,15 36,88 34,87 37,„s 34,41 36,0 100,0 91,4; 102,91 89,4: 116,5, 144,2, 108,58 130,10 128,21 112,60 108,03 102,50 116 ,28 103,7! 107,80 125,5, 108,92 108,. ,70 110,93 102,„i' 88j39 89,19 90,ij 91,4, 108,44 123,23 106,13 83,83 73,62 99.03 101,11 89,56 86,56 69,97 70,18 69,„. 63,9 87,0 42,72 47,16 61,54 4230 47,« «,6S 41,22 «,28 42,4f, 44,46 41,61 39,78 39,66 40,98 40,9s 38,16 «,56 39,60 40,98 39,3, 53,7( 63,05 46,M 60,22 50,28 47,92 «,12 40,92 37,30 37,0, 41,15 31,15 30,34 28,78 25,08 26,89 28,25 100, 100,82 '90,95 117,11 129,28 141,28 116,95 130,59 127,96 112,99 121,88 116,28 121,88 114,14 109,05 108,72 112,34 107,07 110, 112,17 104,61 111,18 108,55 112,34 109,70 107,73 147,20 172,92 123,5, 137,60 187,88 131,36 120,94 112,17 102,25 101,45 113,62 86,39 83,1, 78,89 68,75 70,97 77,44 28,9( 42,0, 44,2i 46,18 38,76 49,02 66,52 46,80 41,76 39^73 35j9( 45,9, 66,6, 46,0, 48,1, 60,9, «,74 45,76 34,24 39,85 36,3! 36,3i se,4j 34,2, 25,1, 33,7, 75. Tin. M.lOO Propor- tionate Numbers, 76. Copper. M.per 100 kg. Propor- tionate Numbers. 1C0,„„ 93,24 107,53 135:33 142,4, 146,37 124,71 167,72 181,85 160,58 134,36 127,99 160,58 160,2 160,9, 174,1, 246,8, 237,2, 2.31,3c 210,12 116,, 116,1 116,1 138,s 134, ,94 244,3, 278,,, 276,7, 271,7, 245,1, 269,44 222,96 198,48 ',94 123, 141,12 138,61 129,34 133,20 124.71 133,40 115,5, 147,68 179,02 148,26 164,89 ,10 149, 163,7; 143,9, 147,0, 110,i; 128,2: 138,64 116,8, 117,05 117,21 110,2, 80,81 108,4s 232,9; 179,8, 186,0, 192,9, 241„. 267,6, 211,0, 276,4, 311,4! 297,5, 212,7i 198,6, 269,36 184,50 163,38 146,32 146,90 178,42 163,90 187,84 199,8, 198,16 179,75 168,53 186,83 100,00 171,9 100,49 .173,56 100,9 108,73 183,42 106,6, 154,08 223,26 129,8. 148,09 j232,5„ 135,2 144,38 |232,8„ 135,35 131,16 '209,10 j 166,18 210,24 186,92 228,54 I 162,55 206, 170,71 172,-7 193,6 204,1 169,63 ,214,44 153,03 148,95 161,95 139,18 1 23,90 102,0 189,1 178,6 194,8, 178,2, I-' 112,, 116,: 120,. 160,1 160,, 132,: 13 172,57 194,39 186,73 183,82 124,00 161,90 116,17 101,98 91,34 91,70 111,37 102,31 117,25 124,70 123y;Q 112,20 106,20 116,62 187,02 167,82 153,72 155,52 151,14 163,02 165,58 190,02 191,50 177,78 183,12 179,60 181,60 171,14 161,62 136,84 131,82 154,40 136.15 143,23 136,13 124,84 U0,9!i 130,05 121,60 139,71 132,90 119,50 112,63 118,71 124, 111,65 109,98 103,67 11,3,33 103,63 108,48 108,76 07,59 89,39 90,44 87,80 04,80 '.'0,47 110,50 111,00 103,3, 106„4 104,44 105,01 99,52 88„; 79,00 76,66 79,10 72,cc 64,5c 75,63 APPENDIX. 233 vithtUe AveiM^e Prices from 1847-1B50, together with the corresponding proportionate Numbers according to Returns of Trade Statistics— coniJMerf. App. XVI. V. — MlNEKAL Vroduce— continued. 77. Quicksilver. y.pev, Propor- 100 1 tionate ; kg. Numbers. 78. Kaw Sulphur. M.per 100 kg. Piopor- tionate. Numbers. 79. Saltpetre, Raw Chili. M.per 100 kg. Propor- tionate Numbers. so. Salt. M.per 100 kg. Propor- tionate Numbei-s. 81. Chalk. M.per 100 kg. Propor- tionate Numbers, S2. Cement. M.per 100 kg. Propor- tionate Numbers m,£ t36.M ■•.384, ■>87,L! a7,M Mm ,l35rt8 'jliU l-'-.sj ;ai,i. "0* I 87.9G 74.16 59„s 53.21 64,39 46,20 49,sa 4S.71 13,M 14,S3 13.38 13.02 10,63 11,10 li,co 10,56 13.,. J 16,44 j 17*. i 20^0 i 16; 62 53,10 52-00 61,33 53^19 ■ 54,., 50,56 53,53 49,»r 53,52 69.1: 53,33 72,16 86,12 101,2. 165,87 94,05 101,8S 83,5B 64,9, 63,85 48,5, 61,91 60,5, 42>, 44„ 45,9i 15«, 13,80 12,36 14.70 13,50 13,98 13,62 12,72 12,90 14,58 15oo 13,71 13,« 12,78 11.56 13,80 13,w 13,06 12,00 11.86 12,32 9^2 11.83 11,49 13.« 13,35 11.77 11,2. 13,70 12, 1,50 100,00 -5.62 110,76 27,60 100«o 29,« 97,31 34.0., 79,37 33,s. Si!.')o 45,« 94.17 34,08 78,92 30« 138,57 S5,„ 122,s7 29,s2 127,35 27.5. 1.52„; 26,68 124,22 ^ 29,M 23.-6 27.7 116, lOS, 92,ji 1 20,7,; 109,87 2'i-i3 100,90 i 21..J6 t 10i,« 101,78 95,07 93,41 103,97 112,11 102,69 100,30 93,52 80,« 103,14 102,95 97,61 70rfo 88,42 85,87 93,05 99.78 ,97 87, 84,01 102,3s 93,« 215,52 23,10 21,72 21,18 30,36 31,33 26,16 31,08 23,96 23,14 27,36 23,1^ 27,76 29,76 28,28 30,« 27,88 28,70 26,0, 22,3, 19,2. 20,« 100«„ 4.50 107.73 4,U2 114-75 3,00 132.7.J 3,48 132,03 3,18 177-52 3,18 133«a 3,36 120.37 3,78 138,17 4,08 116,39 3,78 107,49 3,90 100,23 3,60 116,63 92.7. 108,20 101,43 114,29 !'7.i2 103,51 3,72 3,66 90,16 1,74 81,78 1.74 94,38 2,10 118,50 1,92 122,« 2,M 102, 121,31 116,65 113,0. 93,52 90,32 106,79 90,24 108,35 116,16 110,38 118,97 108,82 112,02 101,76 87,31 75.11 79,93 91,22 2,7. 3,64 3,6. 2,82 3,16 3,16 2,82 2,52 2,26 2,10 2,27 2.09 1,97 1,-4 3x13 100,00 89,33 06,67 77,33 70,67 70,67 74,67 84,00 90,67 84k,o 86,67 oi,67 81,33 72,00 18,„, 41,00 3,12 65,33 38,67 38,67 46,67 42,67 53,33 Hm 65,33 60,89 80,89 80,89 63,67 70,22 70,22 02,67 66,00 50,22 60,44 58,00 46,67 60,44 4:1.78 38,67 3,58 3,« 46, 100,00 92,59 92,59 87,04 92,59 92,59 90,74 92,59 92,59 92.53 103,70 100,00 96,30 »0,3o 101,85 96,30 92,59 96,30 86,19 83,33 77,78 79,63 87,0. 74,1 74„ 165, ,50 96,30 102,17 100,62 110,49 106,79 110,49 104,94 87,0. 104,01 93,8 77,7 4,62 100,00 5,58 120,7s 5,82 125,,,7 6,w 116,88 6,82 126,97 6,64 122,M, 6,64 122,08 6.64 122,aj 5,70 123,38 5,46 118,18 5,16 111,69 5,28 114,29 5,46 118,18 5,34 116,58 5,16 111,69 6,10 110,39 4,86 105,19 4,92 106,49 4,80 4,« 4,25 4,48 4,33 4,19 110,39 103,90 107,79 96,10 93.51 04,81 »*94 101,30 135,50 119,91 111,26 103,90 109,09 107,79 102,10 102,60 96,75 103,68 93,89 91,99 09-83. Total. 90,6. VI.— Textiles. Cotton. M.per 100 kg- Propor- tionate Numbers. 84. Wool. M.per 100 kg. Propor- tionate Numbers ■100,00 !>«,7o 9«,76 ^09,24 ■lO^m ■Il6,m «4,58 ■^09,04 iOS,!!j ^OSm 1-IS, 59 ■IOS,a ■lOf.sa ■/OS,x -'04,53 flS.93 yo2,ii 9(5.51 9S,28 9',76 96,33 P«.i7 SI 111.36 106,38 100,38 110,16 90,60 90,8.1 99,66 108,84 126,36 116,23 109,68 102,36 112,08 128,« 236,64 374,16 436,02 165,52 192,48 172,02 196,86 ■iO-1.15 147,5 «/,63 167,. ^40,60 153, •^^15,70 148, •'»?,.9 131, ■f'/6,or- tioiiate Numbers. 1847-60 1861 18B2 1863 1854, 1855 1851-55 1856 1857 1858 1869 1860 1856-60 1861 1862 1863 18M 1865 1861-66 1866 1867 1868 1869 1870 1866-70 1871 1872 1873 1874 1875 1871-76 1876 1877 1878 1879 1880 1876-80 1881 1882 1883 1884 1885 1881-85 94.SO 118,20 110,22 79,08 71-.M 73,92 92,52 86,74 106,02 112,20 110„M 134,« 109,80 139,80 142,20 167,80 135,30 106,00 136,14 169,32 168,30 167,82 162,54 151,50 163,92 131,62 128, 114, 116, 125, >j4-1 123, ',12 119,0 142,6 122,5 145,5 90, ,37 121,02 120,47 111,80 121,61, 138,86 148,20 128,i,j 100,0 124,6 122,5, 84,0 78, 77, ,73 !l7,5.j ,44 90, 111,84 118,35 116,52 142,03 116,82 147„„ 160rt6 166,46 142,72 111,39 143,61 178,61 177,53 177,0., 171,46 159,67 172,51 1.35,49 120,59 121,02 132.7» 129,87 125.,u 1,50, ,,j 129,24 163,50 95,33 130,82 127,08 118)04 128,18 14G,.,3 156,33 135,22 71,82 76,60 76,03 73,02 101,22 78,36 80,82 70,38 60,78 60,,,2 64,92 65,0-1 64,08 66,18 77,,., 7B,42 66,61 68,04 76,90 78,12 70,08 72,«, 80,70 77,28 72,68 79,.,„ 72.50 7ii.5. 68,4s 73,6c 62,rj] 66,60 67,09 61,65 100,00 105,26 106,85 101,67 140,94 109,11 112,53 95,49 97,99 84,63 84,13 90,39 90,56 89,22 92,13 108,52 106, 78,1 3863,c 3813,7 3678,1 .3930,( 3271,! 3136,1 3566,. 2884 3816,1 3408,1 S768„ 3771,, l',6S >01 .74 94,; 95,66 9.3,23 105,68 109,19 97,58 100,25 112,36 107,60 101,20 110,55 100,95 106,54 95„ 102,, 87„ 78„ 79,. '27 Ow,76 83,15 84,73 90,40 87,05 85,84 3527,10 3522,, 2913,, 3594,; 3666,; 3957,; ,3530,, 4137,, 4942,, 5148,. 4968,78 4540,, 4747,, 4537,74 5009,8, 5012,8, 378 1,2. 3335,02 4336,s 3943,s 4214,9 3416,4 2890,B 3360,2 3566.0; 3189,0. 3026,5, 3326,14 3092, 2902,70 3107,3 100,a, 98,71 95,20 101,72 84,68 81,17 92,30 74,66 97,27 97,62 91,30 91,17 76,40 93,03 94,89 102,42 91,38 107,10 127,91 133,26 128,60 117,51 122,88 117,45 129,67 120,74 97,94 112,22 102,08 109,09 88,40 71.82 86,97 92,27 82,54 78,33 86,09 80,01 76.13 80,43 67,oi 73,2, 67,1, 102,„ 108,61 77,40 78,84 70,02 71,16 70,98 73,80 70,56 79,92 85,56 77,88 72,42 77,28 74,S8 79,80 84,78 82.1, 79„,4 80,16 82,58 84,36 93,16 87,94 85,14 79,96 81,40 69,46 77,19 78,64, 74,32 74,32 76,73 78.^03 77,65 76,0, 100,00 104,59 114,23 104,78 169,18 169,48 130,13 120.79 123,03 110,21 111,05 110,77 115, '17 no, 124, 133, 121,5, 113,0, '.73 ,.52 120, ',00 116,92 124,5, 133,30 128,65 123,97 125,09 128,87 131,65 145,38 139,54 140,67 137,23 132,87 124,78 127,12 108,40 120.16 122,72 115.98 116,98 118.18 lil.rr 121,18 118,62 33,9 36,2; 30,4 36,0, 40,2, 33,5. S4,9i 35.3, •37,68 37.38 37,08 34,74 29.82 32,92 31,63 35,02 32.82 30.76 28,3.] 32,39 30,85 29,82 29,23 28,23 26,51 100,00 95,.i9 105,29 119,80 131,76 110.39 112,55 111,57 119.22 106,27 109,80 108,43 110,98 116,10 99,61 114,51 131.37 109,61 114,12 120,00 126,10 116,49 123,14 122,16 18 121, 113,53 97,45 107,58 103,33 114,4, 107,25 108,17 96,30 100,52 94,25 105 .S3 100,82 106,60 97,.45 96,52 92,25 '■37 ■100^ ^04,39 ■105,01 ■fOY,a ■I03,sa ■I05,w 100,w ^«,18 ■IOS,is lOltm •/ 07,12 •^/0,8! •'24,31 «1'.84 ^^4,26 ■ISt,«i f3'4,;o 100«) 175,M 100,m 16,32 100«o 39.2.8 100,„, 211.1, lOO.oo 216,60 100,00 13,86 100,00 268,08 100,00 •/yO,oo --,1847-60 _ S,Si lOi-K 139,70 79,41 22.80 139„i 61,78 S7,;a 18,.,2 91.-16 192,42 88,84 13,62 98,27 306,18 111,2, -/OSm 1851 7.sfl 89,66 138,15 78,53 21,60 132.35 45,42 76,62 17.62 87,-,, 184„2 84„6 12,..2 89,61 300,00 111,91 yim 1852 w.=« 117,« 150,67 85,65 18.72 114,71 49,aj S2-6, 18,08 89,77 208,20 96,12 12,00 86,58 J13,4, 116„2 -105,1-1 1853 'J.st 124,83 U5,K 82.„ 23,64 1U..,3 63..48 107,0, 17,30 86,90 237,18 - 109,50 20,6. 14S,M 304,98 113.76 i-lij.a 183 1 U 108,57 149,2, 8-4,86 22,50 137,87 66.90 ll'i.sr, 16,67 82-77 JW.,8 111,16 20,22 146,89 298,80 111,« ■lO'hdi 1865 9,B 10.S,2,S 145,23 82.55 21.. 133,82 65.32 ■83,32 17.58 87,2, 212.52 98,12 16,78 113,85 304,08 113,65 ■io6,m 1851-55 9« 104,u 168,38 95,71 17,22 105.51 67,68 114,17 18,15 90,12 213,00 98,34 12.24 88,31 307,-,, 114,68 -ioo,u, 1856 10,56 1-31,3S 173,47 98«i 16.32 100.00 75,!« 128,14 22,30 110,72 217,86 100,58 12,18 «7,88 309.00 n-5,2f, -/Og,oi 18J7 9,66 111k8 166,28 94,52 16,26 99.63 52,7. 88,97 21,49 106.70 205,14 ' 94,71 11,76 84,85 321,96 120,10 90.70 1858 10,,, 116,17 204„7 116,51 18„6 116.18 66,26 93.22 21,12 104,87 212.10 97„2 13,50 97,40 289.32 107,92 «5,67 1859 9,5-1 109,66 190.„3 108,53 16,62 101,84 48,48 81.78 18,58 92,25 211,», 97,45 16,62 119,91 327..8 122.15 h6,ss 1860 9,;, 112«l 181*5 103,26 17,10 104,78 60«> 101,21 20.40 101,29 211,86 97,81 13,26 95,57 311,04 116.03 -lOS.ii 1856-60 15,, 174m8 166,15 • 94,45 22,!B 140,81 64,42 91,80 16,75 83,17 203,10 93,77 22.08 169,31 292.92 109,27 ■f-ig,& 1861 iU 4S0«, 143,22 81,41 37.50 229,78 56,80 91,13 16,22 75,37 190,56 87,98 24,06 173,59 266.22 99.31 -Is6m 1862 •I7.|i 5-i2,,j7 149,24 84,H 3S.„ 234,,3 57,«i 96,25 14.75 73,2. 167.22 77.20 18,18 131,17 283,26 106.66 ■i6-t,u 1863 .5;.r. eM,g3 135„3 77.27 31,86 196,22 52,80 89,07 14,77 73,3, 146.38 67,12 14,70 106.06 342,s« 127,,, 'l6s!,iZ 1861 i;„, 299,3, U9,« 67,87 20.i„ 123,16 62.38 88.36 15,57 77„i 144.48 66^70 12,66 91,34 511,70 116,27 -is-i,w 1865 3«.i. 420«„ 142,65 81,«, 30.18 184^3 64,48 91,M 16,38 76,37 170.16 78,50 18,36 132„,7 299,40 111,68 ^,^,33 1861-65 17,T6 204,1. 120„5 68,75 19,50 119.4, 45.12 76,11 19..,r, 96,62 164,20 71,19 _ 11>22 80,95 296,62 110.3 H-I.w 1866 17:tt 200,6, 107,40 61,05 16,92 103,68 45.18 76.21 18,15 90.12 156,00 72,02 11,70 84,41 325,80 121,53 ■/og.iz 1867 12,,, 147,5, 111,1, 63,18 16.60 95.5, 45.60 76.,2 14,80 73.49 167.62 72,77 12,60 90,91 305,6-, 114,01 ^0/,25 , 1868 io,» 126,21 1117, t! 61,06 20,22 123,<» 46.86 79<,5 14.10 70,01 164,20 71,1, 14,10 101,73 324,30 120,97 i?S,17 1869 ll,s. •130,„ 10G,M 60,33 24,36 149,26 52.56 88,68 13.32 66.14 148.,2 68.75 16.,„ 114,72 308.22 114,97 -l-l-l:%\ 1870 11,10 162«7 109,32 62,14 19,32 118,38 47,04 79.35 16,84 78.65 164.20 71.19 13,08 94,37 311,9, 116.36 ■IOS,ta 1866-70] n..r, 198,3, 141,28 80,31 17,54 107,-M 56.02 94,50 16.32 81.03 149.12 68,85 16„2 118,47 316,66 118,12 -H7,Vi 1871 W.M 220,6, 194,34 110,47 20,,4 128.31 61,86 104,35 26,08 124,53 145.02 66,95 18,90 136,36 204,14 76,15 ■/SS.54 1872 16,;, 189,8, 181,6, 103,28 21„6 134.56 66,22 111,71 19,57 97.17 143.98 68.78 20.3. 146,75 190,80 71,17 ■I-I9.U 1873 13,5, 165,6, 136,47 77,58 24,70 151,35 65,78 94,0, 17,08 84.81 148,94 68.76 20.32 146.61 279,48 104,25 -1-I2.i\ 1874 11,56 130,57 118,82 67,;, 21„6 134.56 62,10 87,8, 16,16 76,27 138,68 64.03 18,04 130,16 261.60 93.85 O'i.-.i 1875 15« 179,08 150,52 86,56 21,42 131,25 68,40 98,52 18,56 92,15 146,1, «7,.,7 18,80 135,64 218,54 92.71 -llhm 1871-75 11h6 131,72 99,22 S6,4o 18,06 110.66 60,52 86,22 16„6 79,25 138,24 63.82 17,14 123,67 241,70 90.16 -lO-t.-ii 1876 ll,66 120.20 207,74 77,.,;, 09,% 1877 10,!8 118,16 88,81. 50,48 17,62 107„7 43,6-4 73,62 12,65 62,81 132,15 61,02 14.46 104,33 233,36 87,05 P7,M 1878 9,1. 108^1 116,36 66,14 14,88 91,18 36,16 61,00 12,09 60,03 126,14 53,2. 14,62 105,.M 198,74 74.13 50,21 1879 M« 124,„ 118,33 67,26 16,62 101,84 36,3, 61,3, 13,10 65,0-. 114,13 62.6, 14,63 106,56 187.88 70,08 9«,23 1880 1«.;2 123,22 102,17 68,08 17,05 104,.,7 42.83 72,25 13,70 68.02 129„3 59.B 16.50 111,83 213,88 79,78 96m 1876-80 12,26 140,„ 120,M 68,24 16,78 96,6, 39.10 65„6 12,05 69,83 109,97 60.77 14,60 105,34 194,86 72,6, W,S9 1881 12,10 139,„ 129,68 73,-3 19,53 119,67 42,82 72,23 11,8, 69,01 110,42 60,98 16,18 109.52 168,46 62,84 99,10 1882 10,51 120,a„ 111,34 63,2, 17,88 109,56 40,71 68,67 11,06 51„2 118,60 64,76 16,16 109.38 191,65 71,(9 9«,38 1883 8,66 99,54 74,52 42,30 17,81 109,13 38,49 64,93 10,42 51,74 119.M 65,33 12,73 91.85 190,92 71,22 9Ui 1884 8,06 92,61 99,95 56,82 11,38 69.73 34,59 58,35 8.85 43.,4 116,23 53,66 17,73 127,92 164,„ 61.52 S-),si 1883 10,12 118,62 107,11 60,8, 16,.i8 10O„8 39,14 66.02 10.85 53,87 115,01 53,10 15,08 108„3 182,16 67.95 - 1881-85 '.i a ' 2 236 ROYAL COMMISSION ON GOLD AND SII.VKR : Ai>p. XVI. Average Price of 14 JBritish Industeiai- Export Articles during tlie Period from 1851-1886 as compared Returns by the Trade Statistics Years. 1817-60 1861 1852 1863 ISot 185S 1866 1857 1868 1859 1860 1856-60 1S61 1862 1863 ISlM. 1865 1866 ■J 868 1X70 ]S71 l.s7a )87.-i lN7t 1.S75 JS71-75 l.s7i; 1N77 1878 1870 1880 1876-SO ISSl 1882 1883 1881 1885 Cotton Yam. ch Propor- per tionate lb. Numbers. S. 4. CStton Manufactures. Piece Goods plain. d. per yard, ll,oe 10,9S 11.2! 10,S2 10,« 12.5< 16,9; 26,01 21.46 2,3.66 21,11 20.27 20,„ 18,92 20,80 1S.06 18.87 17,;f, 15.79 W.66 17.15 13.19 )2,f5 l-,t7 12,33 1S.2S 12.82 12,39 12.98 12.2» 12.2* 11.S8 12,28 100,18 !l7,5o 93,2, ,50 97, 94,82 106,„ 102,59 106,45 107,14 103,is 111,96 M2,69 2.'i2,23 267.14 214,11 191,61 211.25 1 88,48 178,93 168,93 185,71 106,61 368,48 158-5; 1 Ht.sa ] 30,89 163,13 117,77 11^,7! n],3.i 110,09 118,30 lli„ 46 110; 115,. iDil,,.,; 103,3, 109,6, '71 3,10 2,92 2,91 3,08 2,85 2.79 6.09 4.U 3,67 3,79 3,55 4.04 3.33 3,51 3,45 3,22 3,13 3,4, 2,65 2,73 2.71 2,61 2.47 2.33 2.55 i Propor- tionate Numbers, Piece Goods, printed. d. per yard. Propor- tionate Numbers, Stockings and Socks. per doz. Propor- tionate Numbers, Tliread for Sewing. per lb. Propor- tionate Numbers, Glass, Common Bottles. per cwt. Propor- tionate Numbers, Linen Yarn. per lb. Propor- tionate Numbers. Linen Manu- factures, plain. per yard. Propor- tionate Numbers, 94,19 93,87 99,35 91,94 90,00 93,87 92,90 42 ,32 97,, 118, 160, 186,77 162,90 145,16 164,19 133,23 118,39 1?2,26 114,52 130,65 107 ;2 113,23 111,29 103,87 100,97 107,.,2 .03 89, 86„ £8,0 89,0 87,42 84,19 79.68 t6„o 82.26 4.22 4,31 4,20 4.01 4.20 4,11 4,57 5,71 6,32 5,81 5.14 1.71 4.92 *•:' 4,69 4,7; 4,77 ill,M i 4,48 91.29 4,31 100, iOO 97,48 96,57 98,63 96,11 91,76 96,11 92.91 95,65 93,14 117,62 107,78 112,59 109,36 107,32 109,15 109,15 102,52 9?,63 96,65 89,47 86,73 84,21 86,35 82,84 82,38 79,41 82,84 94,05 5,65 104,58 6,36 130,66 6,98 144,62 8.15 132,95 7,84 6)60 5,24 6,75 5)93 135,24 .^,32 120,82 7,06 110,53 6.63 112.36 6.82 108,70 0.79 ''.50 6,82 8.21 6,2K 0,25 90,9 86,9: 80,8, 84,8. 77,83 66,75 81.91 73,25 75,51 75,03 71.37 81,02 88,92 103,82 99,87 89,17 105,99 89,94 84,46 86,88 80,50 P0,7„ 82,80 90,19 M,27 90,32 85,61 88,66 83,95 79,36 82,55 84,84 82, ,80 74,14 79,11 80,00 79,1:2 76,43 11m 2,20 2,27 2,27 2,25 2,33 2,45 2,35 2,31 2,25 3,37 3,58 3,26 3,66 3,49 3.66 3,15 3,13 3.17 3.37 3,15 ,46 100,0 109,5; 116,4, 120,1: 120,1, )21,i( 117,, 114,81 119,05 123,28 129,63 124,34 122,22 119,05 143,39 178,31 189,42 172,40 160, ,32 177,78 181,48 178,31 1'7,7S 1 7,"i,e6 1TS,3, 172,,,, 184,13 187,30 1S6.77 i!i;i,55 184,66 193,65 170,37 366,67 166,61 107,72 173,02 15S,2„ 164,02 ]73,„2 178,31 166., '67 10,6C 10,16 10,65 11,42 10,89 10,84 11,07 11,07 ll.u 10.54 10.30 10.62 10,16 10,08 10.18 10,61 9,97 lO.lK 10,4, li,08 10,24 168,2 11.15 10,99 10,n 10,20 10,10 10.63 0.92 9,55 8,30 0.57 9.52 100,00 91,38 90,17 93,53 98,45 93,88 93,45 96,43 95,43 95,78 90,86 87,59 86,90 87,76 86,29 S5 95 11.05 12.12 11.44 12,11 12,81 12.32 '.16 12, 13,05 13,71 13,os 14,73 13,85 13,68 13,91 13,65 15,80 17,90 16,54 15, Sfi„. 85,6 85,1 83,71 84,57 87.76 89,7,. 96,12 94,74 82,33 87,93 87,„ 91: 61 85,52 82,33 79,9, 80,17 82,50 82,07 I 16,95 17,29 ! 16,91 i 16,1, H-,2 16,35 14,09 16,40 16,51 1.^,7 15,95 15,74 15,62 16.13 16,76 14,62 14.25 1.5,;i2 13,91 13,71 14,36 13,,,5 14,26 14,04 100,60 109,68 108,53 109,59 115,93 111.49 ,05 110, 118.10 124,07 118.37 133.30 126,34 128.80 125,88 123,53 142,99 161,99 149,68 ,81 140, 1 63,39 i6';,47 153,03 146,52 130,50 147,96 ] 3?,94 148,42 lJ9,,i 114,34 ]J2,„ 141,36 145,97 142,62 13.f.,,2 1 28,96 i:38,u 126,88 124,07 I 129,95 126,24 129„5 127,„„ 7,02 6.92 7,65 7.91 7,59 7,42 7.17 7.35 7.34 7.27 7.22 7,27 7,16 7,39 ')43 7,E ' ■::-'n 7.57 ',,1 6.93 7,20 7,08 7.38 00 100.0( 100,2! 98,86 109,29 113, 108,43 106,00 102,43 105,00 104,86 103,86 103,14 103,86 102,29 97,71 107,86 119,86 116,14 108,57 117,57 111.29 107.14 100,86 102,14 107,86 105,57 106,14 108,86 111.43 108.43 108,14 102,00 99,00 102,86 101,14 106,43 102,14 100,43 98,43 99,29 94,57 90,7, 96,71 APPENDIX. 237 with the Aveeagfi Prices from 1847-1850, together with the corresponding proportionate Numbers according to App. XVI. of the United Kingdom. • — r- Sail Cloth and Sails. Propor- tionate Numbers. 10. ■Woollen and Worsted Tarn. d. per lb. Propor- tionate Numbers, 11. 12. 1.1. Woollen and Worsted Manufactures. U. Cloths, &o. I*, per yard. Propor- tionate Numbers, Flannels, &o. Worsted Stuffs. d. per yard. Propor- tionate Numbers, d. ■pei yard. Propor,- tionate Numbers. 100«» 96,7s 117^3 182,47 117,« 113,S3 '51 118, 113,20 113,10 ■l25,u 118,83 117« 128,S8 132,50 136,15 1«« 137,77 136,69 137,89 139,39 1*4,91 153,88 U2,53 140«M 154,85 161,19 155«s 155,41 151,« 155,53 148,38 140,26 126,52 131,49 140,48 129,98 134,63 128,95 118,51 117,21 125,43 23,3; 24,8 23,7 24,6! 27,« 31,3, 32,4, 28« 30,1 32^ 86,9 40,3 40,8 41«6 37,28 3*m 35,74 33^3 36,52 33rf9 36,91 37,26 34,36 32,12 SOw 26,71 30,33 30-,72 26«i 25,62 23,41 23,78 24,19 24,61 ',29 15 100,0 .108,9 103, 107, 101,n 97,99 102,82 105,65 118,10 122,29 183,93 138,90 123,80 128,93 138,94 167.98 172,44 172,49 154, '»17 175,70 159,52 148,82 152,93 144,33 166,27 143,30 157,94 159,41 163,20 lesm 167«i 1*7,03 137,41 128,67 114,29 129,78 131,45 111,4- 109,63 100,17 101,75 103,51 105,31 24,82 24,56 26,10 25,2, 24,3. 24,3 25,a 29,0 30.1 2»,si 30,36 84,28 36,74 37,70 33,78 39,15 40,99 37,w 37,52 41,19 41,00 39,53 39«9 39,67 38,25 35,72 34,53 31,89 .32,34 34,55 32,55 34,1; 38,30 41,42 40,23 37,34 100« 8G,3j 'S2 108, 91 101,95 103,8! 117,24 125,6; 133,89 140,18 125,38 124,38 120,28 128,83 128,82 140,87 140,22 135,19 133,69 185,67 1.30,81 122.16 118,09 109,06 110,60 118,16 111,32 116,89 130,98 141,66 137,59 127, .70, 14,92 14.15 13,91 14,62 18,18 15,25 14,22 14,76 16,01 15,21 16.35 15,74 15,41 17,80 18.64 19,59 19,92 19,55 19,10 .19,24 18,54 18,17 17,68 17,28 18,18 17,55 17,65 18,10 19,76 18,« 18,31 17,52 17,58 16,86 16.59 16,45 17, 00 15,18 15,13 14,82 13,98 13,08 14, ',44 100,00 94,84 93,s3 97,99 '21 31 102,i 95, 98, 107,31 101,94 102,88 105,50 103,28 119,30 124,93 181,30 133,51 1'31,03 128,95 124,26 121,78 118.60 116.82 121,85 117,63 118,'30 121.31 132,44 123,79 122,72 117,43 117,83 113,00 111,19 110,25 113,« 101,74 101,11 99,33 93,70 87,67 96,78 11.98 9,83 9,26 10,52 10k)6 10,07 10,28 10,42 11,02 11,32 10,62 11,99 12,98 12,07 13,84 13,76 12,93 14,04 14,54 13.99 14.52 14.03 14.22 14,02 14,54 _ 12,11 10,93 10,64 12,45 9.90 9,52 9,28 8,90 9,15 Carpets, &o. d. per yard. Proper- tionate Numbers. 1-14. Total. 9,35 9.52 100,00 82,05 77,30 87,81 83,97 79,80 82,05 8-4,06 85,81 86,98 91,99 94,49 88.65 100«8 108,35 100,75 115,53 114,86 107,98 117,20 121,37 116,78 121,20 117,11 118,70 117,03 121,37 101«9 91,24 88,81 103,92 82,61 79,47 77,46 74,29 76,88 78,05 75,46 80,55 82,97 80,47 78,05 79,47 30.52 31.40 30.81 31.51 31,1. 30,0 29,9: 31,0 84,51 35,sr 87,16 36,10 38,93 38,64, 38,60 37,00 37, ,85 34.75 31,52 30,9, 28,7i 26,1 25.7 27,4 100,00 108,82 100,43 91.30 89.54 94.14 99,38 101.97 86.37 96.26 97.32 .95,9C 106.4! 111,04 118,60 122,31 109,78 112,43 110,02 114,62 111.35 120.08 119.1S 119,06 114,13 116,75 107.19 97,22 93,89 95,43 87.11 80.69 79,40 84, '55 «o,oo 97.98 9«.98 •^00,61 9P.53 9S.27 9«,47 !»«,50 ■fOOM ■105,10 ^02,41 ■IOSm «S,45 ■Ii6,is ■'37,80 ■llfiM ■f33,si ■I^Ai ^2«,16 ««l64 ■ISOal •'2S,52 •'a5,06 «4,96 •/2fi,44 ^^9,23 •^^4,04 ■los,n ■lOS.lB ^^5,08 -lOUl •'04,78 ■fOS,3s ^00,48 ■103,111 Years. 1847-50 , 1851 1852 1853 1854 1855 1851-56 1856 1857 1858 1859 1860 1866-60 1861 *'*# 1864 1865 1861-66 1866 1867 1868 1869 1870 1866-70 ^ 1871 1872 1873 1874 1875 1871-78 1876 1877 1878 1879 1880 1876-80 1881 1882 1884 1886 1881-86 288 BOYAL COMMISSION ON GOLD AND SILVER; Afp. XVI. The Proportionate Numbers of the foregoing collected in Groups and in the Aggregate. Years. Airri- cultural Produce. II. Animal Produce. III. Foreign Pruits. IV. Colonial Produce. Mineral Produce, &c. VI. Textiles. Til. Miscel- laneous. VIIL British Export Articles. (I.-VIII.) Total. 1847-50 1861 - 1862 - 1853 - 1864 - 18B5 1861-5 1866 1867 - 1858 - 1859 - 1860 - 1856-60 1861 - 1862 - 1863 - 1864 . 1865 - 1866 - 1867 - 1S68 . 1869 - 1870 - 1866-70 1871 - 1872 - 1873 - 1874 - 1875 - 1871-7S 1876 1877 - 1878 - 1879 - 1880 - 1876-80 1881 1882 1883 1884 1885 1881-86 100,(«, 09,„2 110,71 128,18 160,49 168,82 129,90 1«,03 138,11 119,92 119,48 133,75 131,84 131,46 126,80 120„2 117,89 126,48 124,46 137,64 146,38 141,59 132,40 121,23 74 17 137, , 144, 144,, 146,21 150,99 138,16 144,90 141,«i 145,:,, 132,50 lS2,,j 138,11 138,12 137,50 138,45 143,33 123,35 110,75 130, . XVI. Cocoa. The price varied front 197-42 marks in 1879 to 68.U2 marks in 1851 ; the five-year period price from 151.60 marks in 1876-80 to 69.96 marks in 1851-55. The price in 1855 was higher by 95.28 marks (147 per cent.) than in 1847-60, and higher by 58.42 marks (57 per cent.) than in 1871-75. Speculation has much to do with the e.vtraordi- nary fluctuations in the price of this article. Tea. The price of tea shows slight fluctuations in comparison with those of cofFee and cocoa. In the last decade, 1875- 85, the prices were lower than before. Rice. The price varied from 32.58 marks in 1855 to 17.37 marks in 1885 ; the five-year-period price fi-ora 28.74 marks in 1851-55 to 18.53 marks in 1881-85. The price in 1885 was lower by 16.29 marks (48 per cent.) than in 1847-50, and is lower by 4.21 marks (20 per cent.) than in 1871-75. Tlie Suez Canal, by shortening the sea voyage, has con- tributed to the cheapening of this article. Indigo, Cane (for Chaiks), and Ivory Are considerably higher in price in 1881-86 than they were in 1847-50, the changes in price being 48, 76, and 94 per cent, respectively. This rise in price had already taken place in 1871-76. The price of cochineal, on the other hand, has fallen greatly, and was lower in 1881-85 than in 1847-60 by 68 per cent. The cause of this deoHne is to be found in the progress of chemistry, which has brought out cheap substitutes for cochinea). The prices of mineral products, with few exceptions, show a remarkable decline in recent years. The cause is to be found in the cheapening and extension of production, in the keen competition of the producers of different countries, and in the fact that demand fails to keep pace with the supply We present the variations in these prices in tabular, form : — Articles. Movement in the Annual Price between Movement in the five -yearly Price between Relative Proportion of Prices, 1885 with 1847-50. Relative Proportion of Prices, 1885 with 1871-75. Coal - - prrt 1,000 kg. M. M. 12,31 (1886) and 27,« (1873) M. M. 12,56 (1881-85) and 20,65 (1871-76) M. -r 3,42 (22 °/o) M. - 8,34 (60 %) Iron— Raw - „ 100 „ 6,1, (1886) „ 14,36 (1873) 5,80 (1881-85) „ 10,52 (1871-76) •7- 2,30 (31 7o) - 3.,, (61 7„) .Wrought „ 100 „ 14,26 (1885) „ 34,21 (1873) 15,3, (1881-86) „ 25,86 (1871-75) -4- 6,54 (28 %) - 11.60 (45 7o) Steel - - „ lop „ 3i,ii (1886) „ 77,64 (1865) 3d,os (1881-85) „ 62,68 (1856-60) -r- 19,41 (38 7o) - 18,89 (35 7o) Lead - - „ 100 „ 26,08 (1884) „ 63,03 (1873) 28,25 (1881-85) „ 50,23 (1871-76) ^ 10.59 (29%) - 24,39 (49 °/o) Copper - - „ 100 „ 110,92 (1886) „ 240,24 (1856) 130,05 (1881-85) „ 214,44 (1866-60) -T- 61,04 (36 <>/.) - 08,68 (38%) Quicksilver - ,, 100 „ .554,63 (1883) „ 1,303,50 (1874) 384,27 (1881-85) „ 852,06 (1871-76) -f- 461,09 (65 "/„) - 47li,87 (56 7o) ri866~| Salt - - „ 100 „ l„4-{ 1867 l„ 4,08 (1857) I1886J 1,99 (1866-70) „ 3,84 (1856-60) ■r 2,76 (61 °/o) •T- 1.42 (45 7o) The considerable fall in the price of quicksilver since the discovery of the Californian mines is of especial importance in the silver question, since it contributes to the cheaper separation of gold from silver. The remark- able rise in price between 1872 and 1876 was brought about by speculation. Cotton. The price varied from 436.02 marks in 1864 to 90.60 in 1854 ; the five-year-period price varied from 281.88 marks in 1861-65 to 99.66 marks in 1851-55. The price in 1885 was lower by 8.94 marks (8 per cent.) than in 1847-50, and lower by 47.16 marks (32 per cent.) than in 1871-76. The enormous rise in price between 1862-66 was, of course,, caused by the Civil War in America. A still greater rise in price would have taken place but for the extension of cotton raising in the East India. Wool. The price varied from 432.30 marks in 1860 to 200.72 in 1864 ; the five-vear-period price from 417.24 marks in 1856-60 to 239.56 marks in 1881-85. The price in 1885 was lower by 157.76 (44 per cent.) than in 1847-50, and was lower by 131.76 mai'ks (39 per cent.) than in 1871-75. The chief cause of the lower price of wool is to be found in the extraordinary development of wool-growing in Cape Colony, Australia, the Argentine Republic, and else- where. Silk. Fluctuations in the price of silk are caused'chiefly by the varying yield of silk in China and Upper Italy. The poor product in 1867-69, and again in 1872-73, caused a consi- derable rise in price, which makes the steady fall since 1878 more striking. The price in 1885 was lower bv 9.61 marks per kilogram (26 per cent.) than in 1847-60, and was lower by 14.33 marks (33 per cent.) than in 1871- 75. The price per kilogram of Milan Organizine (22/26) was in francs, gold, cash, as follows during the last 20 vears. We take the figures from a communication received from Elberf eld:—; Years. Highest. 186(5 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1886 114 118 140 127 121 100 118 107 92 75 1205 102 85 89 81 03 66 61 60 55 Lowest. Avcrai;e. 98 106 112 115 114 127 101 114 88 1041 83 914 99 106 92 99* 70 81 66 70i 62 9U 71 864 69 77 66 77 66 735 62 fis; 61 (i34 65 5S 55 47 61 Of 114 articles mentioned in these tables, 51 have risen in price by more than 5 per cent, in 1885 as compared with 1847-50, 66 have fallen in price by more than 6 per cent., while in the remaining eight no essential change had taken place. In comparison with the average prices of the period 1871 -75, the year 1885 shows a rise of more than 5 per cent, in case of but 10 articles. In case of 90 articles a fall of more than 5 per cent, has taken place, while 14 articles show no essential change. Lack of space prevents further remarks on these tables. These notes have been given chiefly to show that wholesale prices are subject to frequent and great changes; that many difEerent factors influence their course, and that it is exceedingly difiicult to get any certain conclusion as to the real level of general wholesale prices at one period compared to another period. If, nevertheless, we were to state in summary form the results of our investigations on the changes in the pur- chasing power of gold, we should say that the cost of hving, compared with the time immediately preceding the great influx of new gold had become higher, for the great majority of the population of Germany, by 60 or 80 per cent, in the last 30 years. Since the period 1871-76 a further rise cannot, on the «hole, be observed. The general level of wholesale prices in the last 5 years is higher by about 18 per cent, than in the period before 1861 but IS lower by about 12 per cent, than in the period 1871-75 But these statements can be taken and should be taken only as approximate estimates, to be accepted with every qualification. •' APPENDIX. 241 APPENDIX. App. XVI. Extracts from existing Mint Laws and Mint Treaties, with Question of Standards. special reference to the United Kingdom, British Possessions, and British India. The Act of April 4, 1870 — (An Act to consolidate and amend the law relating to the coinage of Her Majesty's Mint, 33 Victoria, chapter 10) — makes the following provisions : — As fixed by the Act 56 George III,, chapter 68 (of June 22, 1816), 20 pounds troy of gold, ^ fine, are to be coined into 9;i44 sovereigns, while one pound troy of silver, f^ fine, is to be coined into 66 shillings of silver. The sovereign has therefore by law a weight of 123.27448 grains troy (7.i^8806 grams metric weight), and contains 7-3224 grams fine gold. The shilling has by law a weight of 87-27273 grains troy (5.65518 grams), and contains 5.2301 grams of fine silver. The other gold and silver coins are coined in the same proportions- The tolerance for gold coins is 0.002, and for silver coins is 0.004. The legal tender weight is for the sovereign 122.5 grains (7.93787 grams), for the half- sovereign, 61.125 grains (3.96083 grams). No legal-tender weight is fi.ted for silver coins. Sovereigns and half-sovereigns are legal tender to any amount. Coins under legal-tender weight can be refused . All such coins handed into the Bank of England are cut in two by the bank, and accepted by it only for their weight of standard gold. The loss on light coins is borne by the public. Any person may carry gold to the Mint and have it coined at the rate of 3t. \7s. Wid. per ounce troy, standard fine. No seigniorage is charged. If gold of greater or less fineness than the standard is brought to the Mint, it is there converted into standard gold, at the expense of the owner. For a long time there has been in the United Kingdom but one Mint — that at London. The Bank of England is obliged to accept all gold brought to it and to pay for it at once at the rate of 3Z. 17s. 9d. per standard ounce. The difference of IJd. compensates the bank for its trouble and for the loss of interest between the day when gold is brought to the Mint and the day when it is returned as coin. The consequence of this provision is that the Bank of England almost exclusively carries gold to the Mint. Silver is coined only on Government account, and is legal tender onlv up to 21. In the United Kmgdom, therefore, the pure gold standard exists. From time to time considerable amounts of worn silver coins are withdrawn on the Government account and are recoined. There is no specific legal regulation ot such action- - ^ -, j. i i ^ At the old, so-called normal, ratio of silver to gold o. 1 : 154 (the price of silver being 60id. per standard ounce the intrinsic value of the silver was less than their nommal value bv 7-82 per cent. At a ratio of 1 : 21 (the price of silver being 44jrf. per standard ounce) the intrinsic value is less than the nominal value bv 31.96 per cent. , ^ j j? The notes of the Bank of England are lega tender for all payments, except payments by the bank itself The Bank of England and the other banks of issue in England are not allowed to issue notes in denominations of less than 51. This restriction does not apply to banks of issue in Scotland and Ireland, which are permitted to issue \l. notes. . , , j. „, „{ In all the colonies of Australasia the coinage systemot the Mother Country and the pure gold ^'^"'1^;^ obta^". Branches of the London Mint have been established at Sydney and at Melbourne, which hovvever, ^^jf'^"} only gold. Their coins are legal tender in the United Kingdom and in all British colonies. j„„i ,,Ut<, In the Dominion of Canada the gold standard exists. The sovereigT\s a legal tender f- 4.86f dohars, and an eagle of the United States is legal tender for 10 dollars. Silver coin is legal tender only up to 10 dollars Cape Colony and Natal followed the British coinage system. o 54648. In Hong-Kong and the Straits Settlements Mexican piasters are the chief medium of exchange and the silver standard exists. The silver standard exists in Mauritius and Ceylon, the Indian rupee being legal tender. In British India the silver rupee has been the standard of value since 1835. The rupee weighs 180 grains troy; it contains 165 grains fine silver and 15 grains alloy. The smaller coins (4, i, | rupees) are coined in the same proportion. The tolerance for the rupees and 4 rupees is 14 per cent, in weight and 14 per cent, in fineness. Rupees and 4 rupees are legal tender up to any amount so long as they have not lost more than 2 per cent, in weight. One-fourth and i rupees are legal tender only up to 1 rupee. Gold mohurs, of the same weight and fineness as the rupees, are coined on demand in pieces of 15 rupees ; but neither these mohurs nor other gold coins are legal tender. There are mints at Calcutta and at Bombay to which everyone may bring gold and silver of standard fineness for coinage. There is a seigniorage of 1 per cent, for gold and 2 per cent, for silver, and a charge of 4 per cent, and 1 per cent, respectively for remelting into standard coin. A proclaimation by the Indian Government of 1868, announcing that sovereigns would be accepted at public ofiices for 10 rupees 4 annas, has no result, since gold coins fetch a higher price at the bazaars. The United States- In the United States the double standard existed by law until 1873; though at times inconvertible paper money drove both gold and silver from circulation. The ratio at which gold and silver were coined varied at different periods, so that the actual standard of value alternated. The original monetary unit was the Spanish piaster, sup- posed to contain 375.64 grains ot fine silver. The Act of April 2, 1 793, which established the Mint, provided as follows ; — Gold dollars were to contain 24.75 grains fine troy, and sijver dollars to contain 371.25 grains fine troy. The ratio was, therefore, 1 : 15. Smaller silver pieces were to be coined in the same proportion as the silver dollars. The weight of fine gold in the gold coins was reduced by an Act of July 31, 1834, to 23.20 grains troy, and soon afterwards was changed by an Act of July 18, 1837, to 23.22 grains troy, the standard being changed at the same time from ^i '''O to- The weight of fine silver in the silver dollar up to the present has remained unchanged. The ratio has therefore been, since 1837, 1 : 16 (accurately, 1 : 15.988). After the year 1851 the price of silver was at times so high that it became jirofitable to melt silver coins. It was necessary to retain within the country a sufficient amount of small coin, and an Act of February 24, 1853, reduced the amount of silver in small coins, and provided that they should be coined only on Government account. At the same time they were made legal tender only up to the sum of $5. In 1870 the Government concluded to pass a revised coinage law with a pure gold standard ; silver being de- monetized as a legal tender money. The Bill prepared for this purpose was subjected both by Congress and by ex- perts to repeated and careful examination. During three sessions no final decision was reached on it. It did not become law until April 12, 1873, and no opposition was expressed either in the House of Representatives or in the Senate to the abolition of the double standard which was clearly expressed in it. The silver dollars previously coined (of which, however, but few were in existence) maintained their quality as legal tender; but new dollars were not to be coined either on Government or on private account. The formal complete demonetization of silver as legal tender money took place still further by section 3,586 of the Revised Statutes of 1874. which provided that the Hh 242 llOYAL OOMMLSSION ON dOiAJ AND SILVER App. XVI. silver coins of the United States were to be legal tender only up the sum of $5. xi i i. ^ r. The new coinage law went into effect on the 1st ot Decem- ber 1873; but the pure gold standard which it provided for was at first of no practical importance, and attracted no attention." No noteworthy depreciation of silver had as yet taken place, customs duties and interest on the national debt were paid almost exchisively in gold coin, and m general trade paper money was used unless contracts stipulated for coin. But ■syhen, in 1876, the resumption of specie payments became probable, and the production of silver in Nevada had greatly increased, a vigorous agitation began for the re-establishment of the double standard, and for a large coinage of silver. A joint resolu- tion of the Senate and the House of Representatives estab- lished a commission for investigating the double standard, and a majority of the commission recommended its re- establishment. Representative Bland accordingly proposed in Congress the establishment of the double standard at the old ratio of 1 : 15.988, with free coinage of silver. This proposition could not be carried, as the Bill, in order to be passed over the veto of the President, needed a majority of two thirds. Such a majority could be obtained only by substituting for free coinage a proviso by which the Secretary of the Treasury is authorised and required to buy silver from time to time not less than two and not more than four million dollars' worth per month, and to coin it at once into silver dollars. This Act of February 28, 187?, generally known as the " Bland Bill " or " Allison Bill," put an end to the gold standard which had been established five years before, and made the sih-er dollars, coined at the old rate, legal tender for all public and private debts, unless other stipulation was expressly made by contract. The Act also authorised the President to invite the Governments of those countries which constitute the Latin Union, and of such other countries as he saw fit, to a con- ference at which a common ratio between gold and silver was to be reached by international agreement, and a per- manent ratio between the two metals assured. This was the occasion, as is well known, of the International Mone- tary Conference at Paris, which lasted from the 10th to the 29th of August 1878. As is also well known, the conference did not accept the proposals of the American delegates. It achieved nothing positi-ve, nor did the later monetary conferences, also held at Paris in I88I, ft-om April 8 to May 19, and from June 30 to July 8. On January I, 1879, specie payments were resumed in the United States. The premium on gold had disappeared several months before. No use was made of the privilege of redeeming legal tender notes in coin at the Treasury. The Act of February 28, 1878, has remained m force up to the present time (September 1886), although attempts have not been wanting to bring about its repeal or amend- ment. On the one hand. Presidents, Secretaries of the Treasui-y, and members of Congress have repeatedly re- commended that the coinage of silver dollars be stopped ; on the other hand, members of Congress have proposed as repeatedly free coinage of silver dollars. A remarkable preference for well-secured paper money has developed in the United States. The Comptroller of the Currency has called attention to this in one of his earlier reports : — " The population throughout the country " want paper money, and the banks find it difficult to " satisfy this demand. They find a similar difficulty in " inducing their customers to accept coin. ... It " was supposed that after 17 years of paper money the " public, which had hardly seen a gold piece during that " time, would welcome eagerly the returning yellow " metal ; but a deep-rooted habit proved stronger than " the liking for gold, and the redeemable paper is pre- " ferred." This explains the great variety of paper money which exists in the United States. Besides legal tender notes and bank notes, various kinds of certiflcates circulate. Gold certiflcates were first introduced by an Act of March 3, 1863, which authorised the Treasury to issue certificates for deposits of gold coin or bars. These cer- tificates, intended primarily for clearing-house use, were also to be received in all public payments. V^'hen, on December 1, 1878, the issue of gold certiflcates ceased, the banks of New York found it necessary to establish a de- pository of their own, which issues since Octobfr 14, 1879, certiflcates for gold deposits. An Act of July 12, 1882, again authorises the issue of gold certificates by the Treasury on deposits of gold coin in sums of not less than $20 Silver certificates were introduced by the Bland Bill of February 28, 1878. It authorises every holder of legal tender silver dollars to carry them to the Treasury in sums of not less than .$10, and to receive in exchange silver certificates in the denominations of United States notes. The silver dollars remain in the Treasury for the redemp- tion of the certificates, which are receivable in payment of customs and of all public dues. Since 1873 the Treasury issues certificates of deposits for legal tender notes. The Treasury also issues certificates of deposits of subsidiary coin, which are accepted for their face value in public payments. This is a natural corollary to the provision that subsidiary coins are redeemable at the Treasury in legal tender coins. When, in 1861, greenbacks were made a legal tender in the United States, the banKs associated in the New York clearing-house agreed that clearings should be made ex- clusively in gold. This rule has been maintained since the resumption of specie payments on January I, 1879, and has been applied more particularly in regard to silver. An Act of Congress of July 12, 1882, in regard to the renewal of the charters of the national banks, aimed to put an end to the exclusion of silver dollars and silver certificates by providing that no national bank should be a member of a clearing-house at which gold and silver certificates were not accepted in payment of balances. The clearing-houses have, therefore, been compelled formally to abolish their rule, but in practice gold continues to be used in all clearing-house transactions. In the same way the Secretaries of the Treasury of the Uniiied States have hitherto been careful in practice to pay the interest and principal of the national debt in gold, although their obligation to do so is not positive. More- over, the Treasury holds a reserve of $100,000,000 of gold for the redemption of the greenbacks, whose maximum since 1879 has been A34 6,681,01 6. Germany. Before the coinage reform brought about by the .\cts of December 4, 1871, and July 9, 1873, there existed in Germany (apart from Alsace and Lorraine) seven different coinage systems. The gold standard existed in Bremen ; elsewhere the silver standard pre- vailed. The chief provisions of the Acts mentioned and of some later supplementary Acts are as follows : — The imperial coins take the place of the local coins pre- viously in use ; the monetary unit is the mark. The mark is one tenth of a gold coin called a crown, of which there are struck from a pound (the German pfund) of fine gold 139J pieces. In addition to the crown of 10 marks, imperial gold coins of 20 marks (double crowns) and im- perial gold crowns of 5 marks (half crowns) are struck. The coinage of the last last-mentioned pieces has, hovvever, ceased for several years. The imperial gold coins are to contain 900 parts gold and 100 parts copper ; therefore 125.55 10 mark pieces, or 62.775 20-mark pieces, weigh 1 pound. The variation of the pieces from the standard shall not exceed in weight 24 parts in a 1,000, nor in fineness 2 j)arts in a 1,000. Imperial gold coins whose weight is not under the normal weight by more than 5 parts in a 1,000, and which have not been diminished in weight by violent or illegal damage, are legal tender in all payments. Imperial gold coins which are not up to this weight, and have been accepted in payment by the Empire, States, provinces, or communes, or by banks or other credit institutions, are not to be re-issued. If gold coins have lost by abrasion in consequence of long circulation so much in weight that they are no longer legal tender, they are to be withdrawn and re-coined on account of the Empire. Such coins are also to be accepted by the Empire and by the federal States at their nominal value. Everyone is entitled to have gold coined into 20-mark pieces, at a charge of 3 marks per pound of fine gold. The Imperial Bank must pay gold in bars in redemption of its notes, at the fixed rate of 1,392 marks for the pound of gold. Silver pieces are coined as follows : — 5 mark pieces, 2 mark pieces, 1 mark pieces, 50-pfennig pieces, and 20- pfennig pieces. The pound. of fine silver is coined into 100 marks. The coins contain 900 parts of silver and 100 parts of copper, so that 90 marks in silver coins weigh I pound. Silver pieces must not vary in fineness more than 3 parts in a 1,000 from the standard, and must not vary in weight (except in the case of the 20-pfennig pieces) more than 10 parts in a 1,000. The total amount of imperial silver coins shall not exceed, until further provision is made, 10 marks per head of population. No individual need accept more than 20 marks of imperial silver coins in payments. They are accepted in any amount by the Empire and by the federal States. The APPENDIX. 243 IJundesrat is to designate certain offices which are to redeem imperial gold and silver coins in sums of not less than 20Q marks. Imperial silver coins which have lost in weight, or whose marks have been rubbed oil by long oircidation, are accepted in payments to the Empire and the federal States, but are to be withdrawn on account of the Empire. All older German coins are no longer legal tender, and have been withdrawn, with the sole exception of the thaler pieces. Whatever pieces of this kind still exist are legal tender to any amount, like the Imperial gold coins, ea^;h piece being equal to three marks. An Act of April 20, 1874, provides that Vereins-thaler, coined in Austria before 1867 shall also be full legal tender. Since May 1879 the sales of silver by the German Government have ceased, and with them the withdrawal of thaler pieces has ceased. The Chancellor of the Empire is authorised to renew the sales at any time. An Act of January 6, I87t", has authorised the Bundesrat to put the thaler pieces, and the Austrian thalers already referred to, on the same footing as. imperial silver coins, that is to say, to make them legal tender only up to 20 marks, the thaler being still reckoned at three marks. The Bundesrat is to proclaim such a change in the Reichsgesetzblatt, and it is to take effect at the earliest a month after publication. Since the suspension of silver sales and of the withdrawal of sih'er thalers in May 1879 there is no likelihood that the Bundesrat will make use of the authority so conferred on it. The Act of January 6, 1876, is, however, of importance, since it makes certain the power of the Bundesrat to demonetize the thaler pieces, a power which had been doubtful under the language of Article VIII. of the Coinage Act of 9th July 1873. Denmark, Sweden, and Norway. The coinage system of the three Scandinavian countries is based on the treaty concluded between them on Decem- ber 18, 1872, and on the Acts which they have passed in accordance with this treaty. The pure gold standard replaces the former pure silver standard. On the old system the Swedish thaler contained 6.37().3 grams of fine silver, the Danish half-thaler contained 6.3205 grams fine silver, the Norwegian quarter-thaler con- tained 6.342 grams of fine silver. The new gold unit (the crown divided into 100 ore) contains 0.403226 grams of fine gold. Consequently, the ratios for conversion into the new coinage have been, respectively, 1:16.57, 1:15.43, and 1:15.44. The gold coins are 0.900, fine ; the alloy is copper Gold pieces of 20 cron-ns and of 10 crowns are struck, there being 124 of the former and 248 of the latter to 'the kilogram of gold fine. The 20-crown piece weighs, there- fore, 8.96057 grams, and the 10-crown piece 4.48029 grams; their weight in fine gold is, therefore, 8.06452 and 4.03226 grams respectively. In Sweden pieces of 5 crowns, of a corresponding weight, have also been coined. The tolerance for the gold coins is in fineness li parts in a 1,000, and in weight 14 parts in a 1,000, for 20-crown pieces ; 2 parts in a 1.000 for lO-crown pieces. For large quantities weighing 10 kilograms the remedy for both coins is 5 grams. . . . j. Gold coins cease to be legal tender m private trans- actions when they have lost more than 14 per cent, of their weight. But so long as they have not lost 2 per cent, of their weight they are received in public payments. In Denmark and in Norway the State is obliged to exchange all gold coins which have its impress, and which have lost more than 4 per cent, by abrasion, for full-weight gold coins. The Bank of Norway weighs every coin it receives, and turns over to the State every piece which has lost 4 per cent, of the legal weight. , i r ;.i. Every person who brings to the Mint gold of the pre- scribed quality is entitled to have it coined into 20.orown pieces, on paying a charge of i per cent., and mto 10-crovm pieces on papng a charge of i per cent In Norway the Bank of Norway is obUged to buy gold bars at the fixed rate of 2,473.80 crowns per kilogram fine, and goia is consequently coined only for the bank. SUver is subsidiary coin, struck only on Government account. Pieces are coined as follows : The ratio between gold and silver is accordingly 1 : 14.88. Pieces uf 1 and 2 crowns are legal tender only up to 20 crowns ; other silver coins only up to 5 crowns. The remedy for all silver coins is in fineness 3 parts in a 1,000. In weight the remedy is 3 parts and 6 parts in a 1,000 for double crowns and crowns respectively. For the smaller silrer coins in quantities of a kilogram it is 6.10 and 15 parts in a 1,000. In all three countries specified public offices will redeem subsidiary coins in gold, in sums of 10 crowns or multiples thereof. The coins of each country, struck in accordance with the treaty, are legal tender in all three countries. The treaty has set no limit to the coinage of subsidiary coins. The tables printed in Part VI. of our Materials show how very slight is the circulation of actual gold in the Scandi- navian countries, and in how high a degree the circu- lating medium, so far as it does not consist of silver, consists of bank notes. For more than sixty years the population of the three Scandinavian countries has been accustomed to bank notes as a convenient and secure circulating medium, and notes are preferred to gold coins, as they were formerly jireferred to the heavy silver coins. Ex- ceedingly few coins appear in ordinary transactions. The Netherlands. The double standard was abolished in the Nether- lands by the coinage law of November 26, 1S47, and in its place a single silver standard was adopted. The unit was the florin (gulden) containing 10 grams of silver, of a fineness of 0.945. By Acts of June 6, 1875, and May 10, 1876, the single gold standard has been introduced, by which the unit has made and still re- mains one-tenth part of a gold coin of 10 florins, con- taining 6.720 grams of gold of a fineness 0.900, that is, containing 6.048 grams of fine gold. The earlier Wilhelm d'or had contained 6.0561 grams of ^ne gold. The remedy is for the 10-florin pieces, in fineness 14 parts in a 1,000, in weight 2 parts in a 1,000. Up to the present no gold coins except 10-florins have been struck. Private persons are entitled to have 10-florins pieces struck at the Mint, in so far as the Mint is not busy on State account. The Mint charge is determined liy the administration from time to time, but may not be set higher than 6 florins per kilo- gram of Mint gold. As a rule, the Bank of the Netherlands, which is ready to buy gold at prices fixed at its discretion, causes gold to be coined. The coinage of larger silver pieces is discontinued. Subsidiary silver coins in denominations of 25 cents or less are coined on Government account. The silver coins of 24, 1, and 4 florins remain for the present full legal tender, side by side with new gold coins. These old silver pieces, as stated above, contained 9.46 grams of fine silver, to the florin. The change to a gold standard, therefore, took place on an assumed ratio of 1:15.626. The silver coins still exist in large quantity, and are the most important medium of exchange in domestic transactions, although their intrinsic value is 30 per cent, less than their nominal value. In foreign trade gold exclusively is used, as the Bank of the Netherlands is prepared to pay on demand gold for this purpose. In the colonies of the Netherlands the coinage system of the mother country obtains in the main, there being a difference only in regard to the small subsidiary coins. In France, Italy, Belgium, and Switzerland a uniform coinage prevails. These countries (with Greece, in which, however, an inconvertible paper money is for the present in use) form the so-called Latin Union. This union was originally formed by a treaty concluded at Paris, December 23, 1865, and has been continued by later treaties to the close of 1885. By a treaty of November 6, 1885, and by a supplementary treaty of December 12, 1885, the continuance of the Latin Union was agreed on, after long and heated discussion, till January 1891. ' The coinage system, which follows that of the French Coinage Act of March 28, 1803, is as follows :— App. XVI. Fineness Pieces. ■Weight. Thousanth parts. Pine weight. G. G. 2 Kronen 16 800 6 1 Krone 7,5 50 Ore - 6 600 40Ore- 25 Ore - 4 2,13 600 60O , 2,4 1,452 10 Ore - 1,« 331 Degree of Fineness. WeiRht. Kinds of Coins. Correct yiav^m for Degi-ee. Error. Correct Margin (or Weight. Error. Prancs. r20 - Gold-i 10 - , 5 ■ rs - 2 - Silver-! 1 - 1 0,50 - 10m - Thousandth. [■ 900 ^ 900 j- 855 Thousandth. 2 2 3 Gramm. 6,45161 3,22580 1,01290 25 10 6 2,5 1 Thousandth. } ^ 3 3 } « 7 10 n h 2 244 EOYAL COMMISSION ON GOLD AND SILVER : App. XVI. The 20-franc piece, therefore, contains 5.8065 grams of fine gold, the silver 6-franc piece •J2.5 grams of fine silver; the franc piece 4.176 grams of fine silver. The coinage ratio is, therefore, for the 5-franc piece s 1:15-6, for the smaller silver coin 1:14'3806. Each contracting State agrees to receive the coins of the other States in payments to itself, with the proviso, however, that no coins are to be received that have lost one half per cent, or more of their legal weight. The further coinage of silver 6-frano pieces has been stopped for the present, and can only be resumed by the unanimous agreement of all the contracting countries. But the power to resume their coinage without such unanimous agreement is reserved, on the fulfilment of certain specific conditions. The contracting Governments agree to accept each other's 6-franc pieces in public payments. Each contracting country agrees to accept from the other contracting countries those 5-franc pieces whose weight is less by 1 per cent, than the minimum permitted to be coined. In France the 6-frano pieces are accepted on Government account by all branches of the Bank of France. Subsidiary silver coins are to be melted and re-coined by the Government issuing them, as soon as their weight has lost 5 per cent, by abrasion, or the coinage marks have been worn off. Subsidiary coins are legal tender up to 60 francs for individuals of the country issuing them. Each State will accept from its subjects without limit subsidiary coins of its own issue. Each of the contracting States will receive subsidiary coins, struck by one or more of the other contracting States, in sums of 100 francs at any one payment. Each of the contracting countries agrees to redeem in gold coins, or in silver 5-franc pieces, subsidiary coins issued by it, and presented for redemption by its own subjects or by another contracting country; but no sum under 100 francs is to be redeemed. Subsidiary coins can be issued by the contracting coun- tries only to the amount of six francs per head of popula- tion. This sum can be exceeded under certain specific conditions, but the excessive issues have been comparatively small. The Conventions of November 6, 1885, and of December 12, 1885, contain a number of specific provisions as to the manner in which the redemption of silver o-iraiic pieces is to take place, in case the Union should be dissolved. ANALYSIS. 245 ANALYSIS OF EYIDENCE. {Names of Witnesses arranged in Alphabetical Order.) LoKD ADDINGTON: " Puts in a paper expressing his views, 9620-1. Admits difficulties of existing situation, but has no remedy to suggest, 9522-3, 9534, 9569-71. Comparative adva-ntages of silver and gold as standards of value, 9f)2J-;>2. Probable effects of fixing a bimetallic latio, 057^.-8^, 9592-9601. Difficulty of fixing a ratio, 9505, 9573-5, 9588. Difficulties of two separate standards have been exaggerated, 9536-9, 9561-5, 9603-16. Effect on gold prices of a depreciated currency, 9540-50. As to the alleged bounty on the production of wheat in India, 9557-68, 9590-1. Ebojessok EOBEETS AUSTEN, E.R.S. : Is chemist to the Eoyal Mint, 1198. Puts in a paper on the subject of the cost of pro- ducing silrer, 1200, 1201. Different methods of obtaining silver, 1202-1204 ; by the refining of native gold, 1205-1211 ; by the desilver- isation of lead, 1212-1233 ; bv the desilverisation of copper, 1284-1247; from silver" ore, 1248-1274. General conclusion as to mean cost of production by the above methods, 1275-80, 1326. Explains what is included in cost of production, 1281- 1300. Notices large difierence between cost of production and the market price of the commodity, 1301-1316. Observations on amount of production of silver, 1323- 1325, 1382, 1333. Possibility of new discoveries in the future, 1318- 1320. Mn. D. M. BARBOUE, C.S.I. : Information as to hoarding in India, 1097-1101, 1154- 1160, 1168-1176, 1183-1197. The precious metals are hoarded in the form of both bullion, coin, and ornaments, 1099-1101. Net imports of gold into India since 1835, 1102-1112. Amount of silver hoarded probably exceeds amount of gold, 1113-1116, 1196. Total amount hoarded, 1102, 1117-1121. Causes which are likely to bring out hoards, 1124^ 1129, 1135, 1149-1153, 1155. Consumption of gold in India for various purposes, 1108, 1109, 1130-1134. Illustrations of capacity of the people for absorbing money, 1136-1141, 1145-1148, 1190-1194. Opinion as to probabilitv of a diminution in tendency to hoard, 1142-1157. Probable effect on value- of precious metals of a cessa- tion in hoarding, 1143, 1144. Alteration in purchasing power of silver in India, 1179-1182. Little alteration in price of labour in India in recent years, 1161, 1162. Diagram showing oscillations in prices of silver and of commodities since 1860, 1177. Me. EGBEET BAEOLAY : Is engaged in the export trade from England to India and other silver-using countries, 2230-2235. Mode in which trade has suffered from fluctuations in exchange, 2236, 2261-70, 2280-5, 2369. Extent of the loss incurred, 2271-4. Merchants generally able to protect themselves against loss if all parties to contracts fulfil their obliga- tions, 2237-2246, 2279; but business is necessarily checked by the introduction of a speculative element, 2240, 2246, 2276-2278, 2369, 2373-2379. Silver prices in the East have a tendency to rule the gold prices here, 2246-2260, 2349, 2362 ; and have been littlu adccted by the disturbance in values in Europe, 2245, 2419-2421, 2458, 2459. Advantasre of falling exchange to the Indian mer- chant and "manufacturer, 2287-2299, 2306; growth of Indian cotton manufacture and falling off of certain bi aiiohes in England, 2301-2304, 2319-2334. ^Whaiitages to India of trading with silver-using countries, 2306-2319, 2367-2368. Stiri.ulus to Indian exports of wheat, 2335-2344,2371, 2372. Extent to which the English and Indian export trades are respectively affected by fall in exchange, 2369- 2370, 2395-2401. Manner in which exchange operates on international trade, 2402-2418, 2460-2466, 2486-2496. Advantage and disadvantage to the two countries generally of exchange fluctuations, 2419-2457, 2466- 2494. Causes of appreciation of gold or fall of gold prices, 2349-2353. Is in favour of adopting a fixed ratio between the two metals, 2355-2366, 2477. Objections to introduction of a gold standard in India, 2380-2886. Probable effects of a further fall in silver, 2387-2394. Sib EVELYN BARING, K.O.B. Eflects of the fall in exchange upon the people and Government of India, 7068 ; and upon the employes of the Government, 7116-23. Difficulties of imposing new taxation, 7069-85, 7103; and of obtaining necessary capital for productive public works, 7086-89. Industrial effects of the fall in exchange in India and at home, 7090-7100, 7109-13, 7167. Serious results of a further fall, 7102-6. Opinion as to the practicability of bimetallism, 7108- 7124^73. Me. J. W. BIRCH : Extension of banking expedients during the last 20 years, 1336-1340. Possibilities of further increase, 1341, 1344-1346. Effect of telegraphic transfers, 1342, 1343. Estimates of circulation and of stock of gold in the United Kingdom, 1348, 1362-1365. Light gold and IL notes, 1395-1399. Sources from which Italian demand for gold was met, 1349-1353, Similar information with regard to Ger- many, 1354-1361. South America, Portugal, &c., 1368- 1370. Hoarding in France, 1354-1360. Sources from which gold is drawn through a rise in the rate of interest, 1366-1368. Amount of gold coin melted down for industrial pur- poses, 1371. Stock of gold held by Bank of Prance, 1379-1382. Currency in Spain, 1386-1394, 1400, 1401. Puts in certain statistics as to circulation in France, Germany, Belgium, Italy, and Switzerland, 1378. Me. H. WOLLASTON BLAKE : Is a du'ector of the Bank of England, 7399. Alleged scarcity of gold has been much exaggerated, 7402-3, 7422 ; is not necessarily shown by a fall of prices, 7404. Accounts for fall in several articles independently of scarcity of gold, 7406-8, 7500-26 ; no fall in wages, 7409-15, 7601-5. Causes of the latl in silver, 7416. Effect of the fall on the people and Government of India, 7417-21 ; and on the producers in India and this country, 7450-67. Objections to bimetallism, 7423-27, 7470-9, 7530- 53. SAG EOYAL COMMISSION ON , GOLD AND SILVEli Impractibility of maintaining the ratio between the two metals, 7470-83, 7486-S9, 76S8-69 ; contracts would still be made payable in gold, 7484. . ,.^ „ ,, Eelation between prices and the quantity ot gold, 7428-41, 76S4-7. Annual production of gold is too small m proportion to the whole mass to affect prices, 7442-48. Effect of bimetallism in distributing fluctuations m the amount of currency over the whole world, 7423-24, 7446-49. ■ -.j . -, J ■ Effect, of the gener3,l>doption of a gold standard m the world, 7461-67- LoKD BRAMWELL: Probable effect on the use of the two meials of allow- ing contracts to be made for payment in a specified metal, 8842-8845, 9019-9027, 9039-9043. , Thinks that the Gresham law might be defeated by a suflSciently large combination of bimetallic Powers, 8847, 9043, 9044. . x, ^ Burden of proof lies upon those who maintain that bimetallism, would be preferable for this country, 8847. Iniustioe of any measure that would arbitrarily raise prices, 8847-8849, 8881-8883, 8968-8971, 8995-8999, 9028,9029. . _ ■ . • "^ -.j Doubts the fact of the alleged appreciation.ot gold, 8850,8885-8897,8924-8927,8944,8972. ■ Effect of the appreciation on the rate of wages, 89.73- 80. Effects of bimetallism, at the existing market ratio, 8852-8864. •• Effect of bimetallism in removing the diflaculties under which trade with silver-using countries is now carried on, 8865 ; and upon the interest arising from our foreign investments, 8866, 9047-9050, 9053 ; on the production of the two metals, 8959, 8960. General objections to bimetallism , 8866-8870, 8982- 8994, 9015-9018. Argument that the financial position, of this country is due to its standard, 8871-8880. ' ' Difference between the circumstances existing now and at the time when the change of standard was made in this country, 8898-8917. Increased consumption of gold for industrial pur- poses, 8915-8919, 9001, 9005. The future of gold as an efficient standard of value, 8920-8922,8947-8952. Eeasons why the relative value of gold and silver has altered, 8923, 8924, 8962-8966. Difficulty of the Government of India under present circumstances, 8929. Silver mono-metallism, 3936-8943, Probability of the ratio, if fixed, being adopted and maintained, 8931-8935, 8954-8958, 9001-9008, 9019- 9026, 9030-9035, 9039-9044, 9054-9056. Advantages of a gold over a silver standard, 9009- 9014. Legal tender law in California, 9022-9024, 9033. Mk. J. K. BYTHELL: Is a Manchester merchant, engaged chiefly in the import trade from India, 1897-1899. Mode in which the export and import trade with the East is financed, 1900-1912. General effect on trade of the uncertainty in exchange and extent of the risk imposed upon the several parties concerned, 1907-1931. Alleged stimulus to export trade of India ow,ing to fall in exchange, 1932-2008, 2072-2165, 2185-2190. &.dvantages to the Indian producer, 1933-1944, 1947, 2082-2165, 2184. Causes of fall in gold prices, 1933, 1944, 1945, 1950, 2170. Difficulties of the Government of India have been exaggerated, 2009-2012, 2026-2046, 2066-2071. Eeal extent of the loss sustained by the government, 2013-2059. Borrowing power of the Government as affected by exchange, 2019-2025. Effects of a fixed ratio between gold and silver, 2062- 2065, 2166-2169, 2179-88. Mb. R. B. CHAPMAN, O.S.I. : Has been Pinanoial Secretary to the "Government of India, 10,227. The standard of value has lost in stability since 1873, 10,230-38. Use of the precious metals for storing value, and its effect in withdrawing capital from active employment, 10,239-56, 10,268-85, 10,351-53, 10,368-72, 10,409-16, 10,457-60. The appreciation of gold is due to the dislocation of the ratio between 'gold arid , silver caused by the action of the Latin TJuion, 10,260. Urges a reversion to the system which formerly pre- vailed, 10,261-67, 10,313-17, 10,373-78. Eflects of the establishment of a fixed ratio, 10,379-80. Considerations as to the choice of a ratio between the two metals, 10,286-93, 10,317-60, 10,392-10,408, 10,417-19. There has been no depreciation of silver relatively to commodities, 10,293-10,309, 10,326-32. Effect upon India of a return to the ratio of 15^ to 1, 10,320-37, 10,344-50 10,354-68, 10,393-99. General effects of the adoption of a bimetallic system, 10,423-56. Causes of the fall of prices, 10,461-71. Me. THOMAS OOMBBE : Is engaged in trade between Lancashire and India, 6305-8. Statement of what he under.stand_s to bo the bime- tallic proposals, 6311-12. Remarks on thcipossibility of establishing and main- taining a fixed ratio. 6314-70, 6563-75, 8136-9, 8273-80, 8309-11. Experience of Prance and India in this respect, 6314- 36. Explanation of the steadiness in the relative values of the two metals down to 1873, 6336-42, 6668-72. The fixed ratio will diminish the production of gold end stimulate that of silver, 6343-66, 8293, 8302-10, 8323-31. Summary of objectior.s to bimetallism, 8264-71, 8286-92, 8306-8, 8320-48. Position of England and India as affected by the appreciation of gold, 6371-85, 6602-20, 8140-6. Alleged depression of trade may be due to other causes besides appreciation, 6386-8 ; causes of the fall of price of wheat, 6388-6408, 8147-80. A fall of prices not necessarily injui-ious, 6409-1-"), 8196-8212, 8272, 8315-19; stability of the standard is-, however, desirable, 6416-18, 8309. Effect of appreciation on those who have to make fixed payments, 6419-26 ; and on the wage-earning class, 6426-51, 8181-92. Extent to which prices would be afl'ected by bi- metallism, 6452-91, 8193-5 ; effect upon the trade of silver-using countries, 6492-7. Investment of capital in silver-using countries, 6498- 6518. Production of wheat and cotton goods in India as affected by the fall in silver, 8213-64. Alleged unsettlement of trade with silver-using countries, 6519-57 ; position and difficulties of the Government of India, 6558-62. Is opposed to any action being taken by this country ; but thinks bimetallism might be adopted by the other countries, 6677-89. Mr. B. W. OUEEIE: Existing standard of value is in his opinion satis- factory, 6646, 6713-25, 6838 ; thinks the evils arising from the alleged scarcity of gold, such as a fall of prices" have been much exaggerated, 6647, 6736-38, 6762' 6767-9, 6894-99. Prices are affected by other causes, such as extension of credit,^ 6647, 6768-96, 6846. Statistics showing extension of banking facilities &c. ill recent years, 6648-62, 6665-66. Effect of supply of gold on prices, 6682-97, 6846 6900-1. Eemarks on alleged scarcity of gold, 6652-57, 6663- 64, 6894-99 ; connexion between the rate of intere-898. Probability of extension of banking expedients, compensating increased demand for precious metals, 900-903, 1069-1075. Demand for the precious metals for currency pur- poses, 932-934, 976-979, 1057-1068. Eolation between commercial transactions or produc- tion of commodities and demand for currency, 935-954 1052-1056, 1067, 1068. • As to increase of production in silver-using countries 944-954, 958-962. Inaccuracy of statistics of imports and exports of precious metals in France, 957. Amount of reliance to be placed on index numbers as showing fluctuations of prices, 905-910, 972-975, 991- 1052, 1076-1084. Com])arison of fall in wholesale and retail prices respectively, 911-916, 1037-1039, 1085-1093. Dr. Soetbeer's conclusions as to fall of prices com- pared with others, 1006-1015. Investigations into the fluctuations in wages, or price of labour and services, 913, 918-931, 1040, 1051, 1052. Causes of the fall of prices, 983-990, 1057-1068. Variations of price of silver with prices of com- modities, 986-988. Mk. HBEMANN SCHMIDT : is engaged in business in the city of London, 8572. Believes that the increased purchasing power of gold is due to the fall in the value of silver and the dislocation of the ratio between the two metals rather than to the greater demand for gold, 8573, 8710-8713 ; and does not arise to any great extent from cheaper production, transport, &c., 8599-8632, 8731-8736. Explains how gold prices generally have been aflfected by the deprecation of silver, 8576-8598, 8783- 8788, 8794-8800. Prices have also been effected b'y a decrease of the total volume of currency in the world, 8592-8594, 8671^8693, 8789-8793. Increased burden of contracts, debts, &c., owing to the appreciation of the standard, 8633-8661. Difficulties in carrying on trade owing to fluctua- tions in exchange, 8626, 8527, 8822-8827. As to the choice of a ratio between gold and silver, 8663-8670, 8780, 8832-8838. Effect of breaking the ratio on the Indian demand for silver, 8689-8693. Observations with regard to the system of index numbers, 8694-8709.^ Effect of bimetallism on our foreign -investments, 8714. Stimulus to production and export caused by a depreciated currency, 8715-8730, 8760-8764, 8805-8808, 8817-8819. Explanation of the fact that while silver has depre- ciated in Europe, it retains its purchasing power in the East, 8743-8759, 8802-8804'. Probable effect of restoring the ratio in the produc- tion and use of the two metals, 8766-8775, 8781, 8782, 8820, 8828, 8829 ; efi'ect on prices of the adoption of the existing ratio, 8815, 8816. Course that will probably be adopted in America under present circumstances, 8809-8814. Me. SAMUEL SMITH, M.P. : The fall of prices since 1873 is due to an appreciation of the standard rather than an increase of commodities, 4696-4715. It has also been caused partly by the increased com- petition of silver-using countries, 4721-4726. Evidence derived from index numbers and other sources, 4700-4706, 5881-5913, 5917-5931. Evidence of a contraction of the currency, 4847- 50, 6914-5916. Mode in which a contraction of the currency affects prices, 4716-4742. Causes of the rise of prices before 1873, 4745, 4746, 4843-481-7. New demands for gold in recent years, 4741-4753, 4767-4760 ; have not been compensated for by increased economy, 4754-4761, 4861. Evils arising from the appreciation of the standard and the fall of prices, 4765-4795, 4807-4823, 4858-4908, 4959-4980, 5918-30. Efi'ect of appreciation of the standard on fixed con- tracts payable in gold, 4796-4823, 4909-4956. Protective tarifi's and socialistic movements are en- couraged by depression of trade, 4824, 5932-5940. Efi'ect of the depreciation of silver on the export of Indian wheat, 4810-4814, 4837-4840, 4969-74. Explains the operation of bimetallism as a remedy for the evils alleged above, 4825-4836, 4981-4985 ; num- li 2 252 ROYAL COMMISSION ON GOLD AND SILVER :— ANALYSIS. ber of countries to be included in the bimetallic union, 4827-4831, 4982, 4983, 5943; is in favour of the old ratio of ISito 1, 4832, 4833. Oounexion between the rate of interest and the supply of gold, 4854-6. Mk. PAUL F. TIDMAN: Is a merchant engaged in the trade with the far East, 2813, 2814. Explains manner in which the English exporter "suffers owing to uncertainty ef exchange, 2815-2818. Eeasons why he cannot entirely cover this loss by banking and other expedients, 2819-2829, 2870-2877, 2915-2927. Gives instances of trade being checked m the course 'of last year owing to uncertainty, and panic in the silver market, 2824-2826, 2833-2852, 2981-2986. Import trade not affected by fluctuations in the same way as export trade, 2830-2832. Illustrates loss incurred by tracing an actual transac- tion of export of goods to the East, 2853-2862 ; and a similar transaction of export of produce from the East, 2863-2869. Loss accruing to English capitalists investing in the East, 2878-2885, 3004-3017. Consequent difficulty of obtaining capital for the proper development ot those countries, 2881-2885, 2958-2962. Stimulus to manufacture and production in silver- using countries, 2885-2899, 2936-2970, 2979-2986. Points out stability of exchange between Java and Europe, and consequent commercial advantages of Java as compared with Straits Settlements, 2900-2914, 2971- 2978. Causes of variation in relative values of gold and silver, 2928-2935, 3002, 3003. Effect on the price of silver of the suspension of coinage in France, the Bland Act in America, and the German sales, 2987-3001, 3018. Comparative slowness with which prices in silver countries adjust themselves to alterations, 2944, 2955- 2958, 3019. Mb. HBNET WATERFIELD, O.B. : Is Financial Secretary to the India Office, 1563. Nature of the difficulties felt by the GoTernmcnt of India owing to fall in \ alne of silver, 1565, 1640, 1647. 1710-175-2, 1853-80, 2786-2802. Details of the financial position of the Government of India, 1566, 2767-2774, 2803-2806. ^Items of revenue, 1575-1601, 2656-2716. 'Possibilities of increased taxation, 1598-1601, 16i8- 1652, 1745-1748, 1753-1767, 2764-2766. Items of expenditure, 1602-1638, 1831, 1832, 2655, 2717-2721,2755-2763. Explanation of charge for exchange, 1603-1608, 2650. Basis on which military pay is converted from ster- ling into rupees, 1616-1625. Financial effect of the fall in exchange, 1639-1647, 1735-17-i4, 1838-1881, 2645-2654, 2787-90. Effect of fall in exchange on the borrowing powers of India and on investments in India, 1653-1660, 1722- 1729, 1768-1780, 1833-6, 1888-1895, 2722-2744, 2775. Expenditure on public works, 1713-1721, 1731, 1867- 1876, 2746-2754. Effect on emnloyes of the Government, 1661-1665, 1843-1852, 1882, 1883. Question whether prices have undergone any altera- tion in India, 1666-1680, 2606, 2607. Liabilities of Government of India under old and new contracts respectively, 1681, 1854-1866, 2644- 2655. Effect of fall in exchange on the export and import trade of India, and the producers in that country, 1682-1707, 1781-1830, 1839-42, 2499-2569, 2574-2620, 2807-12. Possibility of a gold standard or currency in India, 1896, 2776-2785. As to effect of alterations in exchange on trade generally, 2670-2604. Observations on Mr. Bagehot's evidence before Select Committee of 1876, 1800-1803, 2594-2604. Real nature of the burden imposed on India, 2613-49. Mk. DANIEL WATNEY: Views as the alleged appreciation of gold, 9372- 9376; and its effect on prices, &c., 93J2-9406, 9437, 9438, 9473-9486. Effect of the quantity of money on prices, 9377- 9386, 9491-9497. Alleged bonus on the export of wheat from India, 9387, 9498, 9499. Objections to bimetallism, 9407-9432, 9456-y471, 9504-9618.^ Suggestions for increasing the economy of gold, 9433-9456. Mk. S. WILLIAMSON, M.P. : Is engaged in trade with Chili and California, 5045- 49. Increased use of the gold standard has been injurious by lowering prices and interfering with exchange, 5950-58. Explains obstructions to trade with silver-using countries, 5954-68, 6983-86,-5996-97, 6016-16; and to investments in those countries, 5964-55. Difficulties of the si^Aiation are increased in Chili owing to the existence of inconvertible paper cur- rency, 6957-60, 5998-6006, 6016-16. Inducement to countries now using inconvertible paper to resume specie payments, if there were a fixed relation between gold and silver, 5960-61. Alleged advantages arising from stimulus to trade of silver-using countries have been exaggerated, 5962- 65, 6017-21. Difficulties of the Indian Government, 6962, 5987-U5. Probable effects on trade of the Indian Government borrowing in silver, 6966-68. Thinks that the growth of our national wealth in recent years has been exaggerated, 5969-74; deprecia- tion of shipping property, 5970-73. Proposed remedy of bimetallism is merely a reversion to a state of things which e.'iisted previous to 1874, 5975-78. Difl'erence between the apprehensions current in the time of the gold discoveries and at the present day, 6007-14. Mh. J. TALBOYS WHEELER : Represents the unccvenanted India civilians, 2191- 2196. They sustain a loss of 25 per cent, on pensions and furlough pay paid in Europe, 2197, 2198, 2227-2229. Complain that the Indian Government have kept them to a bargain made when the rupee was worth about 2,-'., 219;, 2209, 2217. Nature of the uncovenanted service, 2222. Payment of rupee pensions in England a concession made by the Government of India, 2226. GENERAL, INDEX. 253 GENERAL INDEX TO PRINCIPAL SUBJECTS TtlE EVIDENCE. REFERRED TO IN Agricultuke : Effect of exchange difficulties npon — GHbbs, 3234-5, 3778-81. Nicholson, 5618-29, 5052-05. Appreciation : See Pbecious Metals, Prices, Golb. Bank of England: Eeserve of — Marshall, 9866-76, 10,197-202. BobeHson, 6059-00, 6189-91, G198. Silver held by — Gibhs, 3680-6. Bimetallism : Nature of proposed arrangement — Comber, 6311-12. Oibhs, 3461-2, 3786-95. Man-shall, 9837-41. Niclwlson, 4062-72, 5679-701. Smith, 4825-36, 4981-5. Only a reversion to a previously existing system— Chap.aan, 10,261-7, 10,313-7, 10,373-8. Flehlen, 8087. Gihbs, 3716-29, 3786-95. Gmifell, 4174-84, 4190-6. Williamson, 5975-8. Operation of, in preserving the ratio between the two metals — Gibbs, 3487-510, 3545, 4576-86. Grenfell, 4390-4, 4400-8. Nicholson, 5401. Smith, 4825-36, 4981-5. Extent of bimetallic area — Fowlei; 8361-8. Gibbs, 3555-609, 3663-8, 3827-45. Smith, 4827-31, 4962-3, 5943. Previous experience of, in France and Latin Union— Comber, 6314-42, 6568-72. Currie, 6721-4, 6727-34, 6828-32. Fowler, 9273. GMs, 3463-71, 3732-3, 3739, 4o87. G,-enfell, 4178-84, 4190-6. BobeHson, 6209-34. Considerations in favour of— Barclay. 2355-6, 2477. CMrZn, 10,261-7, 10,313-7, 10,373-8. FieUe7i. 8037-49, 8055, 8103, 8129-35. Gibbs 3459-60, 3659-60. NMon,4^07i 5431-4, 5517-22, 5533-5, 5578-92, 5636-69, 5729-39. Sassoon, 10,515-23, 10,551-8, 10,576-625. Williamson, 5960-1, 5975-8. As to practicability of— Baring, 7108, 7124-73. BZafce 7470-83, 7486-99, 7558-69. BramJell, mi 8931-5, 8954-8, 9001-8, 9019-26, 9030-5 9039-44, 9054-6. OoX, 6314-70, 6563-75,8136-9, 8273-80,8359- Fowier, 8357-76, 9273-91. Gibbs, 3669-74, 5785-8. Grmfell, 4307. Marshall, 9705-34, 9861-^, 10,220-1. Baphasl, 6909-10, 6975-81, 7026. Comparison of, with a forced paper currency— Uibbs, 3494-510, 3547-50. Equity of — Bramwell, 8847-9, 8881-3, '8968-71, 8995-9, 9028 -9. FieUen, 8091-7. Gibbs, 3651-8, 3794-808, 3811-24, 5383-5. Nicholson, 4123-44, 4154, 5580-91, 5600-1, 5608- 10. Provand, 3362-8, 3378-84. 8m.Hli, 4836. Ratio to be adopted — Chapman, 10,286-93, 10,317-50, 10,392-408, 10,417-19. Fielden, 8050-9. Fowler, 8357-67, 8420-34, 9267-72. Gibbs, 3627-4.2, 4573-4, 4649-59. Nicholson, 4092-6. Baphael, 6911. Schmidt, 8663-70, 8780, 8832-8. Smith, 4832-3. DiflBculties of, fixing a ratio — • Addington, 9535, 9573-5, 9588. Fowler, 8357-76, 8420, 9267-91. Objections to — Blahe, 743.S-7, 7470-9, 7530-53. Bramivell, 8866-70, 8982-94, 9015-8. Comber, 8264,-71, 8286-92, 8306-8, 8320-48. Currie, 6669-74, 6739^8, 6841-2. Fowler, 8355-6, 9081-8, 9112-22, 9267-94. Baphael, 6910, 6918-9, 6975-81, 7026-9. Watney, 9407-32, 9456-71, 9504-18. Adoption of, by other Powers — Comber, 6577-89. Contention that it is inconsistent with Free Trade principle — Grenfell, 4199-200, 4213-30, 4261-303. Evasion of, by contracts to pay in one metal only — Blake, 7484-5. Bramwell, 8842-5, 9019-27, 9033, 9039-43. Currie, 6671-74, 6745-51, 6810-24, 6835, 6902-7. Gibbs, 3542-6, 4642-8. Grenfell, 4231-61. Efiect on the system of a large increase in the supply of one of the two metals — Fowler, 8414-34, 8447-53, 8560-71. Gibbs, 3610-6, 3661-2, 3675-6. Nicholson, 4076-9, 4119-20. Probable results of — Addington, 9575-88, 9592-601. Blake, 74,23-4, 7446-9. Bramwell, 8852-66, 8959-69, 9047-50, 9053. Chapman, 10,379-80, 10,423-66. Naoroji, 10,678-86. Baphael, 6918-9. Schmidt, 8766-75, 8781-2, 8820, 8828-9. Effects of, on stability of the standard of value- — Blake, 7423^, 7446-9. Fowler, 8447. Nicholson, 4099-100, 4145-7, 5431-4, 5617-20. BobeHson, 6287-92. Effects of, on exchange difficulties — Bramwell, 8865. ffiW-s, 3459-60, 3659-60. Effects of, on the production of the precious metals — ■ Bramwell, 8959-60. Cornier, 6343-66, 8293, 8302-10, 8323-31. Gibbs, 3855-8, 3871-6, 4582-6, 4603-11. Nicholson, 5679-95. Baphael, 6918-19. 254 ROYAL COMMISSION ON GOLD ANB SILVER : Effects of, on monomefcallic countries — Gihhs, 3511-41, 3567-609, 3667-8, 3827-45, 4589, 4614-20. Effects of, on prices — Oomber, 6452-91, 8193-5. Fowler, 7865-83. Gibbs, 3734-45, 3759-77, 3859-76, 4564-72, 4628- 41, 4660-74. Grmfell, 4200-2, 4446-75. Ma/rshall, 9652-9704. Nicholson, 4076, 4099-100, 4145-7, 5636-8, 5740- 65. Schmidt, 8815-6. Smith, 4834-5. Effects of, on owners of gold or gold securities — Gibbs, 3776-7, 5383. Effects of, on the financial and commercial position of England — Bramwell, 8871-80. Ourrie, 6669-70, 6698-712, 6753, 6797-809, 6843. Fowler, 8414, 8447-66, 8473-81, 9112-22, 9293. Grmfell, 4304-6. Nicholson, 4102-8, 5542-3. Raphael, 6920-3. Effects of, on England as a creditor country — Bramwell, 8866, 9047-50, 9053. Fowler, 8476-81, 9271. Bavhael, 6985-9, 7021. Schmidt, 8714. EfTects of, upon India — 0/iapmffTO, 10,320-37, 10,344-50,10,354-8, 10,393-9. Oomber, 6492-7. ' Nicholson, 5740-65. Sassoon, 10,493-516, 10,559-71. Bland Act: Barclay, 2389. - Giffen, 588-93, 629. Grenfell, 4203-12. Raphael, 6937-9, 6990-7. Schmidt, 8660-1, 8809-14. Tidmam, 2987-3001, 3018. Bounty : See India ; Silver-using Counteies. Oalipoknia : Legal tender law in — • Bramwell, 9022-4, 9033. Chili : Effects of depreciated currency in — Fowler, 8386-7. Gibbs, 3069-84, 3179-3212, 4547-52, 5384-7, 5789-90, 5804-7. Williamson, 5949-57, 6015-19. China and Japan: Effect of exchange upon trade with — Provand, 3266-88, 3306-16, 3320. Trade between, and India — • Barclay, 2301-4, 2319-34. Frovand, 3320-35, 3343-5, 3354-61, 3413-22, 3429-56. See also ExcHAuaE ; India ; Silvek-using Countries. Cotton Industry: Check to, in England in consequence of Indian com- petition — Barclay, 2301-4, 2319-34. Comber, 8220-64. Fielden, 7961-81. Provand, 3320-35, 3343-5, 3354-61, 3415-56. Comparative advantages of England and India in respect of — Comber, 8220-64. FieUen, 8013-36. Growth of, in America. Comber, 8220-3. FieUen, 8070-77. CrauaENCY : Functions of Government as regards — Currie, 6838-40. Necessity of an elastic currency — GiMis, 3617-26, 3846-54. ^See aZso Bimetallism ; Gold; Precious Metals. Depreciation : See Precious Metals ; Silver. Discount, rate of, see Gold. Exchange : Effect of alterations in, on international trade — Addington, 9536-68, 9590-1, 9603-16. Barclay, 2236-45, 2261-70, 2275-8, 2280-5, 2369, 2373-9, 2402-57-, 2460-96. Baring, 7090-7100, 7109-13, 7167. Blahe. 7450-7. Bythell, 1907-2008, 2072-165, 2185-90. Comber, 6619-57, 8213-64. Currie, 6769-96, 6844-83. Fielden, 8046, 8060-9. Fowler, 7742-5, 7942, 8381-413, 8435-i6, 8467- 504. 8512-59, 9067-79, 9092-104, 9173-253, 9321-41. Gibbs, 3042-3, 3046-9, 3068, 3098, 3106-8, 3114-45, 3179-3227, 3229-33, 3241-4, 3677-9, 3687-714, 4517-53, 6385-6, 5789-803, 5808-15. Maclean, 5036^4, 5051-63. Marshall, 9735-806, 9891-937, 10,226. Nicholson, 3920-32, 4076-89, 4111-18, 4145-63, 4156-70, 6422-30, 5618-31, 6662-669, 5711-28. Nisbet, 10,018-49, 10,066-120. Provand, 3266-89, 3306-36, 3354-61, 3385-404, 3413-22, 3429-56. Raphael, 6941-6, 6982-9. Sassoon, 10,474-9, 10,492-513, 10,524-36, 10,641- 50. Schmidt, 8576-98, 8626-7, 8716-30, 8760-4, 8783-8, 8794-800, 8806-8, 8817-27. Smith, 4810-14, 4837-40, 4969-74. Tidman, 2816-77, 2916-27, 2936-70, 2979-86. WaterfieU, 1682-707, 1781-830, 1839-42, 2499- 620, 2807-12. Watney, 9387, 9498-9. Williamson, 5950-65, 5979-86, 5996-6006, 6015- 24. See also India ; Silver-using Countries. Exchange Banks : Operations of, in connexion with tho Eastern trade — Bythell, 1900-12, Maclean, 4990-5035. Provand, 3262-65, 3290-304, 3336-4-2, 3346-63, 3369-74, 3405-8. Small reserves kept by — Maclean, 5046-55, 5096-9. France : Agio on gold in — Gibbs, 3477, 3529, 3608, 3732-3, 3832-9. Fowler, 8416-19. Circulation and stock of precious metals in — Birch, 1379-82. Raphael, 6948-60. Robertson, 6209-12. Demand for precious metals in — Giffen, 629-31, 682-7. Experience of bimetallism in — Comber, 6314-42, 6568-72. Currie, 6721-4, 6727-34, 6828-32. Foioler, 9273. aibbs, 3463-71, 3732-3, 3739, 4687. Grenfell, 4178-84, 4190-6. RobcrUon, 6209-34. Hoarding in — Birch, 1354-60. Free Trade: As to contention that bimetallism is inconsistent with — Grenfell, 4199-200, 4213-20, 4261-303. GENERAL INDEX, 255 Gold : Alleged scarcity or appreciation of — Blako, 7402-3, 7422. Bramwell, 8850, 8885-97, 8924-7, 8944, 8972. Gurrie, 6652-7, 6663^, 6894-9. Fowler, 7703-21, 7774-800, 7889-902, 9057-66, 9147, 9167-71, 9295-311. Gills, 3025, 5201-5, 5220-2, 5354-62. Grenfell, 4316-29, 4346-80, 4476-82. Macleod, 7181-5, 7222. Nicholson, 3951-8. Raphael, 6964, 6969. Schmidt, 8692-4, 8674-93, 8789-93. Smith. 4696-715, 4847-50, 5914-16. Watney, 9372-6. Williamson, 5950-8. Causes of appreciation of — Barclay, 2349-53. Ghapmarit, 10,260. aHls, 3025-7. Grenfell, 4439-41. Nicholson, 4052-61, 5455-64.- Schmidt, 8673, 8710-13. Meaning of the term " appreciation" — GMs, 3038, 5180-8, 6201-5. Marshall, 9625-8. Effects of appreciation of— Bramwell, 8973-80. Comher, 6371-85, 6419-51, 6602-20, 8140-6. Gibls, 3092-9, 6189-90. Grenfell, 4409-24. Marshall, 9816-36. Nicholson, 4028-50, 4158-70, 5413-8, 5553-77, 5602-35. Raphael, 6985-9. Robertson, 6267-78. Schmidt, 8633-61. Smith, 4765-823, 4868-980, 6918-30. WiUiam.soH, 5950-8. Increased demand for — Barbour, 1102-12, llSO-4. Birch, 1349-71. Bramwell, 8915-19, 9001, 9006. Giffen, 489-543, 672-81, 603-6. Montagu, 1447-67, 1467-8, 1536-8. Nicholson, 3896-919, 3933-41, 5487-503, 5547-62. Sauerbech, 932-4, 976-9, 1057-68. Smith, 4741-53, 4767-60. Connexion between supply of gold and rate of dis- count — Bythell, 2067. Currie, 6658-62, 6754-6, 6884-93. Gills, 5328-52, 5368-73. Marshall, 9651, 9662-6, 9676-86, 9943-81, 10,177- 89, 10,222-6. Raphael, 6966-74, 7047-64. Robertson, 6139-48, 6189-94, 6239-66. Smith, 4854-6. Existing supply of gold — Barbour, 1102-12. Birch, 1348, 1362-65, 1378-82. Fowler, 770?>-V7, 9147. Gibls, 5322-7, 6355-68, 5374-8, 5396-400, 5831- 41. Hay, 287, 438-43. Marshall, 9865-76, 10,197-202. Palqrave, 48-54, 94-107, 122-4, 133-6. Pixley, 147-72, 198-206, 263-5. Sauerbech, 892-4, 896-8. EflSciency of, as a standard of value — Blahe, 7461-7. Bramwell, 8920-2, 8947-52, 9009-14. Traditional preference for, in this country — Gurrie, 6671-4, 6745-51, 6810-24, 6902-7. B.easons for adoption of gold standard by Germany — Raphael, 6923-30. Economies in the use of — Fowler, 7736^1, 7799-802, 7944-5. Gibbs, 3747-58. Giffen, 556, 558, 559. Grenfell, 4360-76. Montagu, 1411-13, 1422, 1432, 1435-45, 148«- 807. Smith, 4754-61, 4851. Watney, 9433-65. See also Bimetailism ; India ; Pkecious Metals ; Pkioes. Gresham Law : Operation of — Bramwell, 8847, 9043-4. Gibbs, .3478-84, 4588-6C2. Hoarding : Barbour, 1097-101, 1113-29, 1149-57, 1183-97. Birch, 1354-60, 1366-8. Chapman, 10,243, 10,255-7, 10,268, 10,285, 10,351-3. Giffen, 624-8. Marshall, 9705-34, 10,121-3. Nicholson, 5488, 5499. Raphael, 6948-50. Sauerbech, 892-4., 896-8. See also Feance ; India. India-! Financial position of the Government : Barclay, 2477. Bytheli, 2013-59. Waterfield, 1566, 1575-638, 1681, 1831-2, 1864- 66, 2644-721, 2765-63. Difficulties of the Government owing to fall in the value of silver — Baring, 7068. Blahe, 7417-21. Brarmoell, 8929. Bythell, 2009-12, 2026-46, 2066-71. Comber, 6558-62. Currie, 6667-8. Marshall, 9807-15, 10,140-76. Naoroji, 10,643-52, 10,690-700. Waterfield, 1565, 1646-7, 1710-52, 1853-80, 2786- 802. Financial effect of fall in exchange — Barclay, 2477. Baring, 7068. Bythell, 2013, 2059. Marshall, 10,140-7. Waterfield; 1639-47, 1735-44, 1838-81, 2645-54, 2787-90. Mode in which the loss by exchange is brought to account — WaterfieU, 1603-8, 2650. Possibilities of increased taxation — Ba/rimg, 7069-85, 7103. Sassoon, 10,481, 10,534, 10,560-2. WaterfieU, 1598-601, 1648-52, 1745-8, 1763-67, 2764-6. Effect of fall in exchange on the borrowing power of the Government and the investment of capital in the country — Baring, 7086-9. Bythell, 2019-25. Comber, 6498-518. Marshall, 9807-16, Sassoon, 10,490-1. Wat&rfield, 1663-60, 1722-9, 1768-80, 1833-6, 1888-95, 2722-44, 2775. Williamson, 6695. Effect on the producers and trade of Indi.'i — Barclay, 2287-99, 2301-44, 2357-72, 2395-496. Baring, 7090-100, 7109-13, 7167. Blahe, 7460-7. Bythell, 1932-2008, 2072-165, 2184-90. Comber, 6376-85, 8140-6, 8213-64. Currie, 6771-96, 6847-83. Fowler, 8381-3, 8398-401, 8435-46, 8483-504, 9067-79, 9183-263, 9321-41. Gibbs, 4481-516. Maclean, 5064-76, 6100-3, 6146-66. Marshall, 9735-806, 9891-2. Naoroji, 10,642-52, 10,690-700. Nicholson, 3920-32, 4076-89, 4111-18, 4146-53, 4156-62, 5422-30, 5621-6, 5662-69, 5711-28. Provand, 3320-35, 3343-5, 3364-61, 3413-22, 3429-56. Sassoon, 10,474-9, 10,492-613, 10,524-50. Schmidt, 8715-30, 8760-4, 8805-8, 8817-9. Waterfield, 1682-707, 1781-830, 1839-42, 2499- 569, 2574-620, 2807-12. Effect on the employes of the Government — Baring, 7116-23. Marshall, 10,145. Wat&rfield, 1661-5, 1843-52, 1882-3. Wheeler, 2197-229, 256 ROYAL COMMISSION ON GOLD AND SILVER Effect on the growth of the cotton industry — Barclay, 2301-4, 2319-34. Cmler, 8220-64. Fielden, 8006-36. Frovand, 3320-35, 3343-5, 3364-61, 3415-56. Effect upon the export and production of wheat — Addington, 9557-68, 9590-1. Comber, 8147-80. Gurrie, 6771-96, 6847-83. Fowler, 8377, 8398-403, 9092-104, 9183-224. Ma/rshall, 9735-806, 9891, 10,226. Nicholson, 4146-62, 5621-6, 5652-69, 5711-28. m«6ef, 10,018-49, 10,066-120. Schmidt, 8715-30, 8760-4, 8805-8, 8817-9. Smith, 4810-4, 4837-40, 4969-74. Watney, 9387, 9498-9. Probable effect of the establishment of a fixed ratio between gold and silver — Baring, 7091-3. Bythell, 2062-5, 2166-9, 2179-83. O7iapma»,10.320-37, 10,344-50,10,354-8,10,393-9. Comber, 8287-90. Fielden, 8037-8, 8100. Qihbs, 3651, 6384. Grenfell, 4450. Naoroji, 10,654-86. Nicholson, 5740-7. Frovand, 3365. Sassoon, 10,559-71. Waterfield, 1786-8. Prices in India — Barbour, 1162,1179-81. Barclay, 2264, 2419. Baring, 7167. Chapman, 10,293-309, 10,325-32. Fowler, 7742-5, 7942, 8383-413. Giffen, 761-93, 859-63. Maclean, 5148. Nicholson, 5740-65. Schmidt, 8743-69, 8802-4. Tidman, 2944, 2955-8, 3019. Waterfield, 1666-80, 2606-7. Wheeler, 2218. Possibility of introduction of a gold standard — Barclay, 2380-6. Fowler, 9360-9. Waterfield, 1896, 2776-85. Hoarding in India — Barbour, 1097-1129, 1136-57, 1190-4. Effect of the Council Bills— Gibbs, 3030-4, 3114-20. Maclean, 5130-40, 5167-74. Marshall, 10,140-4, 10,164-76. Robertson, 6279-86. Sassoon, 10,481. WaterfieU, 2574. Demand for precious metals in — Gibbs, 312't-34. Giffen, 672-81, 694-6, 601-2. Hay, 409-14, 444-9, 452-7. Pixley, 176-81. Marshall, 10,164, 10,177. Robertson, 6102-4. Sassoon, 10,480, 10,484-9. Schmidt, 8689-93, 8748-60. Waterfield, 1885-7, 2574-2612. See also Bimetallism; Exchange; Silver-using oounthies. Java : Trade with, compared with other Eastern countries — Frovand, 3409-13. Tidman, 2900-14, 2971-8. Population : Growth of, compared with employment — Fielden, 7956-61, 7980, 7991-8003. Precious Metals : Production and supply of — Austen, 1323-6, 1332-3. Blake, 7442-8. Fowler, 7705-17, 9147. Gibbs, 5322-7, 5355-68, 5374-8, 5396-400, 5831-41. Giffen, 464-88. E'ay, 287-97. Nicholson, 3882-93, 40.^2-61, 6465-64, 5636-40. Falgrave, 21-36, 108-21. Fixley. 147-72. SoMerbeoh, 879-84, Sources of information as to, and their value — Giffen, 464-83, 648-52. Hay, 298-331, 431, 4.58-63. Falgrave, 108-21. Fixley, 148-72. Cost of prodaction of — Austen, 1200-316, 1326. Currie, 6675-81. Gibbs, 4603-11. Gifen, 620, 637-8. Hay, 426-30. Fixley, 232^5. Pi'obabilities as to future production — Austen, 1318-20. Hay, 425. Nicholson, 5623-6 Falgrave, 225-31. Demand for — Birch, 1349-61. Chapman, 10,239-56, 10,268-85, 10,351-3, 10,368- 72, 10,409-16, 10,457-60. Giff'en, 489-606. Montagu, 1447-67, 1467-8. Nicholson, 3896-919, 3933-41, 5455-62, 5547-52, 5772-84. Robertson, 6195-208. Sauerbeck, 932-4, 976-9, 1057-68. Smith, 4741-53, 4757-60. Williamson, 5950-8. Indian demand for — Barbour, 1097-160, 1163-76, 1183-97. Giffen, .572-81. Hay, 409-14, 444-9. 452-7. Falgrave, 78-89, 131-2. Fixley, 175-81. Robertson, 6102-4-. Sassoon, 10,480, 10,484^9. Waterfield, 1886-7. Use of. for industrial purposes — Birch, 1371. Bramwell, 8915-19, 9001, 9005. Giffen, 607-19, 659-62. Hay, .371-422, 432-7, 450-7. Nicholson, 5487-610. Falgrave, 56-7, 117-9. Fixley, 175-8, 182-8, 219. Sauerbeck, 885-7, 955-6. Use of, for coinage — Hay, 332-68. Falgrave, 37-47, 70-2, 90-4, 125-30, 136. Fixley, 196-7, 280-1. Estimates of total stock of — Gibbs, 5374-8, 5396-400. Giffen, 621-4. Falgrave, 48-51, 101-7, 122-4, 133-5. Fixley, 263-5. Means of economising for currency purposes — BWch, 1336-46. Currie, 6648-62, 6665-6. Fowler, 7736-41, 7799-802, 7941-6. Gibbs, 3747-58. Giffen, 556, 668-9. Grenfell, 4360-76. Montagu, 1407-9, 1413-29, 1435-45, 1469-73, 1486-1507, 1512-20, 1539-47, 1567-9. Sauerbeck, 891-903, 963-71, 1069-75. Smii^i., 4764-61,4851. Watney, 9433-55. Relative value of, causes of divergence in — Blake, 7416. Bramwell, 8923-4, 8962-4. Glmpman, 10,260. Fowler, 9124-31, 9295-306. Gibbs, 3025-41. Grenfell, 4439-41. Nicholson, S879-S1, 3886, 3894, 6511-16,5593-9, 6670-8. Raphael, 6931-4, 6998-7011, 7024. Sassoon. 10,672-3. Schmidt, 8573, 8710-13. Tidman, 2928-35, 3001-3. Comparative advantages of, as standards of value — Addington, 9524-32. Bramwell, 8920-2, 8936-43, 8947-52, 9009-14. Marshall, 9882-90, 10,000-14, 10,139. GENERAL INDEX. 257 Value of, not dependent upon supply or cost of pro- dRction — Orenfell, 4330-2, 4338-45, 4381-97, 4400. Prices : Causes which affect — Gurrie, 6647, 6768-96, 6846. Oibhs, 5189-200. Qiffea, 833-58. Sauerieolc, 983-90, 1057168. Methods of reoordiug changes hi level of — aiffen, 663-97, 709-17, 719-30, 827-30. NichoUon, 5535^8. Index numbers, method of, and objections to — Fowler, 7766-63, 7802-3, 9138-40. Giffen, 672-6,680, 687-92. Marshall, 9696-704, 9986-99. Saxierleck, 905-10, 972-5, 991-1052, 1076-84. Schmidt, 8694-709. Smith, 4700-6. Greneral conclusions as to coni'se of, in recent years — Oibhs, 6205-19, 6266-62. Giffen, 697, 701-5, 718, 731-48, 763, 832-46, 864- 70. Marshall, 9696-704, 9985-99.'^ Niohohon, 5449-54. Sauerbeck, 911-16, 1006-15, 1037-9, 1085-93. Smith, 4T00-6, 6881-913, 6917-31. Course of, in previous years — Fowler, 7818-21. Oibhs, 5266-62. Giffen, 749-60, 847-50. Marshall, 9696-9704, 9986-99. Nicholson, 5449-54. Falgrave, 6-18. Smith, 4745-6, 4843-7. Williamson, 6007-14. Causes of fall in — Ba/rclay, 2349-53. Blake, 7406-8, 7500-25. Bythell, 1933-5, 1950, 2170. Chapman, 10,461-71. Comber, 6371-408, 8147-80. Fowler, 7704-5, 7749-53, 7764-73, 7805-48, 8349- 64, 9136-4'J. Gibhs, 5201-5, 5220-2. Orenfell, 4316-29, 4346-80, 4442-6, 4476-82. Macleod, 7209-16, 7220-1, 7286-94. Nicholson, 3920-32, 3957-78, 4076-89, 4111-18, 4146-70, 5422-30, 6618-31, 6662-69, 5711-28. Raphael, 6951-63, 7030-46. Robertson, 6133-8, 6149-63, 6179-82. Sassoon, 10,537-9, 10,574-5. Sauerbeck, 983-990, 1057-68. Schmidt, 8576-98, 8600-32, 8674-93, 8710-13, 8731-6, 8783-800. Smith, 4696-4715, 4721-6. Wainey, 9392-9406. Effects of fall in— Comber, 6409-15, 8196-212, 8272, 8315-19. Cv/rrie, 6647, 6736-8, 6762, 6757-9, 6894-9. FieUen, 7577-607, 8004-12, 8081-2, 8119-28. Fowler, 7717-8, 7940-1, 9106-11. Gibbs, 3104^5, 3238, 3617-23, 3847-61, 5189-200, 5816-18. Marshall, 9816-36. Nicholson, 4028-50, 4158-70, 5413-8, 5553-77, 5602-35. Raphael, 6951-63, 7030-46. Robertson, 6267-78. 8m,ith, 4765-95, 4807-23, 4858-908, 4959-80, 5918-30. Watney, 9392-406, 9437-8, 9473-86. Selation' between prices and currency— Blake, 7428-48, 7654-7. Currie, 6682-97, 6900-1. Fowler, 7722-35, 7742-55, 7846-88, 7903-39, 8482-8511, 9069-66, 9148-66. Gibbs, 4654-72, 4675-93, 5223-55, 5262-321, 5388-96, 5820-30. Orenfell, 4324-5, 4372-4, 4482. Maciod, 7177-80, 7186-206, 7224-62, 7271-94, 7301-98. Marshall, 9629-95, 9938-84, 10,121-31, 10,222-5. Nicholson, 3979-4026, 6465-86, 6772-84. Falgra/ve, 6-18. Raphael, 6965. Robertson, 6139-48, 6189-94, 6239-66. Smith, 4716-42. W(itmy, 9377-86, 9491-7. o 34648, Effect on, of fall in the value of silver — Addington, 9640-50. Fielden, 8006-12. Fowler, 7742-6, 7942, 8383^.13, 9092-104. Naoroji, 10,631-41. Nicholson, 3920-32, 4076-89, 4111-18, 4145-70, 5422-30, 5618-31, 5652-69, 6711-28. Schmidt, 8076-98, 8783-8, 8794-800. Smith, 4731-6. In sihcr-using countries — Barbour, 1161-2, 1179-82. Barclay, 2245-60, 2349, 2352, 2419-21, 2458-9. Clut.'pman, 10,293-309, 10,326^32. Fowlsr, 7742-5, 7942, 8383-413. Giffen, 761-93, 869-63. Maclean, 6148. Nicholson, 5740-65. Schmidt, 8743-59, 8802-4. Tidman, 2944, 2955-8, 3019. WaterfieU, 1666-80, 2606-7. Wheeler, 2218. Of labour — Blake, 7409-15, 7501-5. Bramwell, 8973-80. Comber, 6426-51, 8181-92. FieUen. 7621-36, 7990^. Giffen, 795-814, 822-5. Orenfell, 4409-24. Marshall, 9816-36. Nisbet, 10,060-3. Sauerbeck, 913, 918-31, 1040. Retail prices — Giffen, 794, 818-26. SoMerbeck, 911-6, 1037-9, 1085-93. Russia : E ffeot of depreciating currency in — Fowler, 7742-5, 7942, 8377-8413, 9092-9104. Schmidt, 8716-22. WaterfieU, 2572. SiLVEE : Causes of depreciation of — Blake, 7416. Bramwell, 8923-4, 8962-6. Chapman, 10,260. Fowler, 9124-31, 9296-306. Gibbs, o025-7. Orenfell, 4439-41. Nicholson, 3879-81, 3885, 3894, 5511-16, 5693-9, 5670-8. Raphael, 6931-4, 6998-7011, 7024. Sassoon, 10,572-3. Tidman, 2928-35, 3002. Effect of a further fall in — Barclay, 2387-94. Ba/ring, 7102-6. Gibbs, 3109-13. Orenfell, 4308-15, 4336-7. Sassoon, 10,517. Production of — Austen, 1323-5, 1332-3. Currie, 6675-81. Giffen, 485-8. Nicholson, 3882-8. Falgrave, 30. Cost of producing — Austen, 1200-1300. Pixley, 232-45. Possibilities of future production — Austen, 1318-20. Comber, 6343-66, 8293, 8302-10, 8323-31. Demand for, in recent years — Giffen, 582-602, 646-7, 659-62. Robertson, 6088-6101, 6108-9. Connexion between price of, and prices of commo- dities — Barbour, 1177. Gibbs, 3134. Sauerbeck, 986-8. Schmidt, 8576-98, 8783-8, 8794-800. iterations in purchasing power of — Barbour, 1161-2, 1179-82. Bwrclmj, 2245, 2419-21, 2458-9. Chapman, 10,293-309, 10,325-32. Gibbs, 3028^1. Giffen, 761-93, 859-63. Schmidt, 8743-69, 8802^. Wat&rfieU, 1668-80, 2606-7. Wheeler, 2218. Kk 258 EOYAL COMMISSION ON GOLD AND SILVER. Hoarding of— Baa-hov/r, 1113-16, 1196. As sole standard of value — Bramwell, 8936-43. Fowler, 8560-9. Marshall, 10,139. Formerly held by the Bank of England— Gihbs, 3680-6. Price of, governed by London market — Pixley, 142-6, 268-79. Abolition of silver-plate duty — Baphael, 6940. See also Bimetallism; ; PuEcions Metals ; Prices. SlLVEB-USlNG COUNIBIES : Difficulties of trade -with — Addington, 9636-9, 9551-5, 9603-16. Barclay, 2236-45, 2261-70, 2275-8, 2280-5, 2369, 2373-9. Blahe, 7421. Bramwell, 8865. Bythell, 1907-31. Oomler, 6519-57. Gv/rrie, 6769-96, 6844-83, Fielden, 8046, 8060-9. Gihbs, 3042-9, 3068, 3106-8, 3215-6, 3229-33, 3241-4, 5791-803. Maclean, 5036-44, 5051-63. Nicholson, 4121-2. Provamd, 3266-89, 3306-19, 3375-7, 3385-404. Baphael, 6941-5, 6982-9. Sassoon, 10,492, Schmidt, 8626-7, 8822-7. Tidman, 2815-29, 2833-77, 2915-27. Williamson, 5954-8, 5983-6, 5996-7, 6015-6. Difficulty of obtaining capital for development of — Bythell, 2019-25. Gomher, 6498-518. Fielden, 8038-42. Oihhs, 3101-3, 3146-78, 3194-6, 3218-20, 5847-61. Sassoon, 10,490-1. Tidman, 2878-85, 2910, 2958-62, 3004-17. WaterfieU, 1653-60, 1722-9, 1768-80, 1833-6, 1888-95, 2722-44, 2775. Willianison, 5954-5. Stimulus to production in, owing to fall in ex- change — Addington, 9557-68, 9590-1. Blake, 7453-7. Bythell, 1933-44, 1947, 2082-165, 2184. Gomber, 8213-64. Fowler, 8381-413, 8435-46, 8482-504, 9067-79, 9099-104, 9183-6, 9243-53. Gibhs, 3069-73, 3138-45, 3179-212, 3779-84, 3811-12, 4517-53, 5385-6, 5789-90, 5804-7, 5872-9. Maclean, 5064-76, 5100-3, 5146-66. Marshall, 9735-806, 9891, 10,226. Nicholson, 4111-8, 4145-53, 4156-70, 5425-30, 5621-31, 6652-69, 6711-28. Nisbet, 10,018^9, 10,066-120. Sassoon, 10,474-9. Schmidt, 8716-30, 8760-4, 8806-8, 8817-19. Smith, 4810-14, 4837-4.0, 4969-74. Tidman, 2885-99, 2936-70, 2979-86. Waterfield, 1682-1707, 1781-1830, 1839-4.2, 2499 -569, 2574-620. Wainey, 9387, 9498-9. WilUamson, 5962-5, 6017-24. Encouragement to trade with each other, to the ex- clusion of gold-using countries — Barclay, 2306-19, 2357-68. Gibbs, 3715, 5808-15. See also Exchakge. Standaed of Value : Meaning of— Grenfell, 4178, 4185-9, 4197-8. Macleod, 7177. Stability essential in — , Comber, 6416-8, 8309. Nicholson, 5403-12, 5419-21, 5702-10. Evils of appreciation of — Gibbs, 3092-9, 3617-26, 3846-54. Schmidt, 8633-61. Smith, 4696-4715, 4765-4823, 4909-56. Williamson, 5950-8. Existing standard has lost in stability — Chapman, 10,230-8. Grenfell, 4316-29, 4346-80, 4476-82. Existing standard is satisfactory — Gurrie, 6646, 6713-25, 6838. Comparative advantages of gold and silver as standards of value — Bramwell, 9009-14. Marshall, 9882-90, 10,000-14, 10,139. Gold as a standard of value — Blake, 7461-7. Bramwell, 8920-2, 8947-52. Traditional preference for gold in this country — Gurrie, 6671-4, 6745-51, 6810-24, 6902-7. Financial position of this country said to be due to gold standard — Bramwell, 8871-80. Gurrie, 6669-70, 6698-712, 6753, 6797-809, 6843. Grenfell, 4304-6. Nicholson, 4102-8, 5542-3. Baphael, 6920-3. Silver as sole standard of value — Bramwell, 8936-43. Difficulties arising from separate standards — Addington, 9536-9, 9551-5, 9603-16. Fielden, 8046-9, 8055. Gihbs, 3677-9, 3709-14, 4483-516. Essentiallv a matter for international action — Nicholson, 5527-32. See also Bimetallism ; Gold ; Silver. Telegkaphic Tkanseers : Effect of, in economising currency — Sauerbeck, 892-5, 967-70. Wages : Effect of appreciating standard on — Bramwell, 8973-80. Comber, 6426-61, 8181-92. FieUen, 7577-607, 8119-28. Gibbs, 3076-9, 3082-9, 3090-1, 3138-9, 3213-14, 3743-6, 4529-53. Grenfell, 4409-24. Marshall, 9816-36. As to rise or fall in — Barbour, 1161-2. Blake, 7409-15, 7501-5. Bramwell, 8973-81. Nisbet, 10,050-3. See also Bimetallism ; Pbices. Wheat : See India ; Russia ; Silver-using Countries. WoiiKiNG Classes: Condition of, as affected by currency changes — Comber, 6426-51, 8181-92. Fielden, 7577-607, 7021-700, 7950-4, 7982-6, 7990-4, 8079-83. Gihbs, 3213-14, 3743-5, 4528-53. Grenfell, 4409-24. Marshall, 9816-36. 269 GBNEEAL LIST OF APPBNDICEB TO THE SEVERAL REPORTS OF THE COMMISSION. FIRST REPORT. 308 I.-Table put in by Mr. S. Pixley, showing the monthly fluctuations in the price of silver in ^'^' London from January 1833 to October 1886 ------. 306 II.-Tables put in by Sir Hector Hay, showing, for (a) gold and (i) silver, the estimated production of the world, the imports and exports in England and India, and the coinage of the principal countries of the world from 1862 to 1885 in.— Tables put in by Mr. Gitfen, showing total estimated production of gold and silver, by weight and value, since 1493 ; detailed estimate of production in the several countries s'ince 1851; amount of gold in the Banks and State treasuries of various countries since 1872; amount of gold and silver coined down to 1885; imports and exports of gold and silver in China since 1858 ; and a record of prices in the New York market since 1825 - - 310 IV.— Papers put in by Mr. A. Sauerbeck, showing course of prices of commodities in England from 1846 to 1885, and prices of principal articles of home consumption or manufacture - 317 v.— Papers put in by Mr. Barbour relating to the subject of hoarding in India ; and wages of postal runners from 1855 to 1885 - - . . . „„„ Diagram showing fluctuations in prices of commodities and price of silver. VI.— Paper prepared by Professor Eoberts Austen for the use of the Commission on the subject of the cost of producing silver -----.. Qor VII.— Papers put in by Mr. Birch with regard to the currency and circulation in France, Germany, Italy, Spain, Switzerland, and Belgium - - . . _ ooq VIII. — Papers put in by Mr. Waterfield : A. — Note and tables showing details of Indian home charges - - - . . 333 B. to D. — Tables relating to the trade of the United Kingdom and of India - - . 333 P.— Monthly exports of silver and of cotton manufactures to India in 1885 and 1886, with value of Council Bills. (/See correction of this Table, p. 138 of this Volume.) - - . 33^ G. — Table showing diflPerence between estimated amount of rupees required for payment of home charges and amount actually realised from 1874-5 to 1885-6 - - . . 339 H. — Table showing excess expenditure due to fall in exchange in each year since 1874-5 on old and new contracts ----- . _ " ooq K.— Extraordinary expenditure (famine, war, &c.) of the Government of India since 1874-5 - 339 L. — M. — Details of net revenue and expenditure of Government of India since 1875-6 - - 340 N. — Prices of Indian Government securities ---..._ 3^9 O. — Comparison of the financial position of the Government of India in 1880-1 and in 1885-6 with note by Sir John Strachey -----.-. 342 P, — Statistics of jute and cotton mills in 1876-7 and 1884-.J - - . _ _ 34^ Q. — Joint-stock companies in India in 1885 - - . . _ g^g IX. — Papers put in by Mr. Barclay ; 1. Progress of Indian mills during the past 22 years ..... g^g 2-5. Exports of cotton yarns and manufactures from India and the United Kingdom - - 345 6, 7. Effect on Lancashire cotton industry of Indian competition - - . . 34g X. — Papers put in by Mr. Gibbs t 1. Note on Exchange ■«. Freights as a local influence on exports - . . . . 349' 2. Note on the influence of the currency of Chile on its export trade with the United Kingdom - 349 XI. — Papers put in by Mr. A. Provand, M.P. : 1. Table showing prices at Shanghai from March to August 1886 - - . _ 351 2. Table showing results of 56 transactions completed with Shanghai between January 1886 and May 1887 ---------- 351 XII. — Correspondence between the Treasury, the India Office, and the Government of India on the silver question -.-.----.. 353 260 SECOND EBPOET. Page I. Letter from Mr. Alfred do Rothschild to the Chairman of the Commission - - - 222 II. Memorandum by Mr. J. Barr Robertson on the Rise and Fall of Prices in consequence of In- crease or Decrease in the Volume of the Currency ------ 22.3 III. Paper laid before the Commission by Mr. H. D. Macleod on the Relation betsveen Prices and the Standard of Value - - - - - - - - - - 226 IV.— Papers put in by Mr. J. C. Pielden :— (a.) Statistics of the Position of Ten of the leading Trade Societies as regards Employment of Members ---------- 250 (b.) Statistics relating to the Cotton Trade and the Population of Lancashire - - 250 (c.) Figures showing Cost of Production in the I'ndian Cotton Mills - - - 251 (d.) Exports of Cotton Yarn from Grreat Britain and India - . . - 251 V. — Paper put in by Mr. T. Comber showing Reduction in Cost of Transport of Indian and American Wheat since 1873 ---------- 252 VI. — Paper put in by Mr. W. Fowler showing Russian Exports of Wheat in the last 20 Years, with ' the Rate of Exchange --------- 252 VII. — Questions addressed to certain Persons in foreign Countries with the Answers received from — Professor Pierson (Netherlands) ------- 254 Professor Nasse (Germany) ----..- 257 Professor Lexis (Germany) ------- 264 Mens, de Laveleye (Belgium) ------- 270 Hon. David A. Wells (.United States) - - - - - - 272 The Questions were as follows : — 1. To -what do you attribute the fall in the value of silver, as compared with gold, since 1874 ? 2. What probability is there of a continuance of the fall ? 3. To what do you attribute the fall in the wholesale prices' of many commodities which has been in prog)-ess during the last 10 or 12 years ? 4. Has it extended to (a) retail prices, (6) wages, and other payments for services rendered, (c) land, and houses ? 5. Has the fall resulted in any material prejudice to the commercial or general interests of the world ? 6. Do you consider that the countries using the gold standard, or any of them, are suffering from an injurious contraction of the currency which might have been obviated or mitigated by an increase in the supply of gold ? 7. To what extent and in what way are prices affected by the quantity of the metal or metals used as standards of value ? 8. What is the relation, if any, between the supply or quantity of the precious metals and the fluctua- tions of credit ? 9. Has there been during the last 15 years any important development of the system of cheques, bank credits, l.iills of exchange, or other means of economising the use of the precious metals ? 10. Do you consider that an international agreement could be made for the free coinuge of gold and silver as legal tender money at a ilxed ratio ? 11. Is it in the power of Governments to maintain such a ratio if agreed upon ; and would the practice of the commercial world follow the law ? 12. What would be the effect of such an agreement, if carried out, upon (a) prices, and (6) the produc- tion of the precious metals ? 13. Do you consider an international agreement for bimetallism possible on any other ratio than 15^ to 1 ? 14. Failing an international bimetallic agreement, what measures could be adopted by the commercial nations of the world for giving increased stability to the relation between gold and silver ? 15. It is argued that, in the absence of bimetallism, the effect of any disturbance of the currency is limited to half the currencies of the world, and thereby increased in intensity. Do you consider this view correct, and if so, do you think the evil a serious one f 16. If the efi'ect of such disturbances could be spread over all countries, would greater stability of the standard of value be secured thereby ? EINAL EEPORT. (See p. 78 of this Volume.) LONDON: Printed by E t Jt e and S r o T t i .s w o o i . Printers to the ()ueen's most Excellent Majesty. For Her Majesty's Stationery OflSce.