Sm,—In a leading article of June 22nd on "The Battle of the Standards" you alluded to ' Inquirer," but Iam not sure that you intended in the article to answer my question (you ignored Sir David Bar-dour altogether). But briefly, the questions came simply to this:—Is it best for trade in the long run that the world should maintain as stable a standard of value as possible? You apparently reply that it is not, again asserting, as a prouf, that, the late fluctuations in the standard have been a benefit to the export trade of Eh You write (the italics are mine);—" The export trade in truck' has been created by the fall in silver and again "The wheat trade in India has been created by the fall in silver.
As, usually, the tail does not wag the dog, when you assert that the medium of exchange created the exchanges, the burden of proof rests with you. What proof have you? At bottom, commodity is exchanged for commodity, not for the gold and silver, which are but the bridges between. Do you really think that, whatever might be the condition of the' mediums of ex. change, gold and silver, anyone would knowingly keep on exchanging a commodity of greater for another of less exchange value? Do you think that the fall in silver would lessen the cost of production of tea, for example? Would it cheapen the cost of subsistence for the labourer, or of the tools, or of the land, or of transports, or of commissions? Is not your proof simply the assertion that the export trade has fourished, and, if exporters will admit this, may it not have been despite, not because of, the fall in silver? The world cannot stop moving because the wiseacres have made a mess of the medium exchange. Men must live; production must go on; trade must go on; and there are many causes that affect trade far more than even the excellencies or defects of the mediums of exchange, important though they are. May not one or more of these have produced the effect? I can remember when the cheaper coast freights and the opening of the Suez Canal were commonly assigned as the chief causes of the "truck" trade then springing up. The authority who assert that India's wheat trade is the legitimate return for the previous heavy expenditure on public work aided by the abet tariff of the United States burdening its agriculturists, are as com-pots those who assert that it has en created by the fall in silver. There has been a marvellous cheapening of commodities in the West from economic improvements, independently of th rent cheapening caused by the appreciation of gold, China has shared in these advantages, especially in improved communications and cheaper freights; the country has been recovering from "the devastation ut who Taipings; and, in addition, competition has forced down the prices of her staples. Lowered prices, widening the circles of those who can afford to buy, promote exchanges. With either hi-metallism or gold only for the world, the effect of the lowering should continue, and would no longer be retarded by such fluctuations in the medium of the exchanges as trade has been suffering from.
2nd July.
Text read from the printed page and cleaned; old type leaves the occasional error.