more for every 1,000l. bill on England, and this extra cost destroys or diminishes his profit.
Secondly, the same state of the exchanges is a direct premium on sending goods from India to England. 1,000l. received for those goods here, will go further in buying bills on India than it used to do; in plain English, it will lay down more rupees at Calcutta, in the same time, than formerly, and this increase is so much extra profit. By this combination, therefore, exports from India increasing en one hand, and imports into India diminishing on the other hand, before long a large debt will be created, which this silver, set free from Germany, will have to fill. The process will take time, but the effect is inevitable. The tendency of this great import of silver into India will be of course to raise prices, but the degree in which it will have that effect will depend on the degree in which it is counteracted by the causes which have intercepted its effects before — the hoarding habits of the people; the use of silver in ornaments (the ornaments being a sort of reserve fund to be sold in difficulty); the greater extension of silver in rude districts, where barter is still much used; and the general increase of trade, which rising prices always tend to quicken and develop.
When this rise of prices has taken place the encouragement to exports from and discouragement of imports into India will manifestly cease. The value of the rupee at Calcutta, as against bills on England, may remain as it is now; but the diminution of that value as compared with former times will be compensated by the greater number of rupees which the English exporter to India obtains for the goods which he sells there. The value of the 1,000l. in London in purchasing bills payable on India in rupees may be as unusually great as now, if we compare it with the past, but there will be a corresponding difficulty in obtaining the 1,000l. in London. The merchant in India will have to pay more for the goods which he sends to London, and in the end this loss will be equal to the other gain.
If new silver should still continue to come into the market the same process must go on. The first step must be incessantly repeated. The value of the rupee must fall as against sterling money; instead of being 1s. 9d. it may fall to 1s. 6d. And then, mutatis mutandis, what we have just described as happening will happen again.
The effects, therefore, of the fall in the value of silver on the trade of India will be temporary only, but its effect on the financial position of the Indian government will continue as long as the fall lasts. The Indian revenue is received in silver, and, therefore, the less far silver goes in buying, the poorer will the Indian government be. And this is of more instant importance to the Indian government than almost any other, because its foreign payments exceed those of most governments, and those payments are made in gold. It has to pay interest in gold on a very large debt in England, to pay home salaries, maintain home dépots, and buy English goods and stores all in gold; and the less valuable silver is in comparison with gold, the less effectual for these necessary purposes will the Indian revenue be.
On one species of its debt the Indian government will, indeed, not lose. The interest upon rupee paper is payable in rupees in Calcutta, and therefore the diminution in the value of the rupee is a loss to the creditor who receives, and not to the government which pays.
How long the fall in the value of silver will continue no one can say. In the last resort, and taking great intervals of time into the reckoning, the relative value of gold and silver will be determined by their cost of production; but in the case of articles so durable, and so liable to be affected by political events like changes in coinage, it is difficult to say how long an average must be taken in order to exhibit distinctly this final result.
A most valuable MS. has been discovered in the Azores. It refers to the colonization, in the year 1500, of the northern part of America, by emigrants from Oporto, Aveiro, and the Island of Terceira. It was written by Francisca de Souza, in 1570. Barboza Machado states that it was lost during the great earthquake of Lisbon in 1755. This most important document is about to be published by an erudite Azorian gentleman, and will throw great light on the disputed question of the early discovery of America.
