The whole subject of the disturbing influence of the decline in the value of silver on the trade between gold and silver using countries is complicated and difficult of analysis, and the opinions of persons practically interested in such trade are not harmonious; but it is difficult to see how one can investigate the subject, with the light of the experience which the years that have elapsed since 1873 has contributed, without coming to the conclusion that the seriousness of the disturbances has been greatly exaggerated, and that the expediency of attempting to provide remedies by legislation for such as may be acknowledged to exist—if legislation were practical—is very doubtful.
One feature contingent on the fall in the value of silver, which appears to be regarded in England somewhat in the light of a popular grievance, is the decline in the value of the pensions, or "half" pay allowances which have been given by the Indian Government to their retiring officials for good and extended service. These pensions are granted in India, and are payable there in the current money of the country—i. e., the silver rupee—and, before the decline in silver, had an equal purchasing power with gold; and at the present time, so far as these pensions are spent in India, no loss occurs, because the purchasing power of silver in that country has not fallen materially. But, on the other hand, if the rupees are remitted to England, and sold there at the price of bullion, or if, what amounts to the same thing, the remittance is effected by the purchase of a bill of gold exchange on England, the loss in English money to the pension or half pay recipient residing in England is considerable, and has been estimated to average about 25 per cent. At the same time, it is to be remembered that there has been no loss, but rather a gain, in the present purchasing power of silver, as compared with its purchasing power at the time when the pensions or half-pay in question were granted.
- In connection with this subject, the following extract from the record of the examination of Mr. H. Waterfield, Financial Secretary of the India Office, London, before the British Trade and Silver Commission (February, 1887), will be read with interest:
Question (Sir T. Farrer). "So that, while India has been doing much more, Lancashire has been doing more than she did before?"
Q. "Then I will ask you, do the figures [submitted] justify the statement that the present state of things—that is, the fall in exchange—is causing the gradual transfer of the yarn-trade of China to India; that the exports from England have steadily declined since the fall of silver commenced, while those from India have enormously increased?"
A. "The increase of the imports from India may, indeed, be termed enormous; but it is not correct to say that the exports from England have steadily declined since the fall of silver commenced; and I think that the fall in exchange is not the cause of the improvement in the Indian trade."
Q. "At any rate, you would not see in these figures any reason for protecting Lancashire against India by a radical alteration of our currency system?"
A. "No; I should think it as objectionable as allowing any protection of India against Lancashire."