xxxii Contents. considerable extent supplied from the currencies of France, Germany and other countries ; gold partlv took the place of this silver ; there was thus an increased demand for gold, ana another influence was in this way broucht into operation to maintain the value of gold — As there is much uncertainty about the future value of gold and silver, arraneemente which involve fixed pecuniary payments over a Ions period of years should as far as possible be avoided— Why the gold discoveries have exerted a special influence in promoting the pros- perity of Australia— Gold-digging is not more profitable than other kinds of industry, but a gold discovery acts more powerfully than any other cause to attract labour and capital to a colony — Other kinds of industry in a young colony involve, in the first instance, great risks; a supply of labour must be insured, and much fixed capital has to be expended in constructing roads, etc.— These obstacles impede gold-digging less than any other industry. PAGES 495—510 Chapter XVI. The Depreciation in tlie Value of Silver, The supply of silver remained almost stationary until about 1870, when it very greatly increased — Silver has rapidly declined in price— The rapidity of the fall when compared with the slight and gradual fall in the value of gold explained oy the circumstance that when the gold discoveries were made there was a great additional demand for gold ; whereas there has been a great falling-off in the demand for silver at the verv time when its supply was increased — The falling-off in the demand for silver has been partly produced by the demonetisation of silver in Germany and other European countries — There has been a great falling-off in the demand for silver in India — The quantity exported during the last ten years is less than a third what it was during the ten years previously— This falling-off in the demand is chiefly produced by the increasing proportion of the Indian Revenue which is spent in England— The depreciation in silver may be estimated in two ways : first by comparing its value with that of cold, and secondly by considering its general purchasing power— The fall in the value of silver has not yet oeen accompanied bv a general rise of prices in India— This rise in prices will probably however occur, because it vrill become exceptionally profitable to purchase goods in India and exceptionally unprofitable for the people of India to purchase goods abroad— This will stimulate the export of silver to India — India suffers peculiar inconvenience and loss from a deprecia- tion in the. value of silver, because a large portion of her revenue is fixed in pecuniary amoimt and is paid in silver, and she has annually to pay a large sum to England in gold — A sold currency is wholly unsuitable to India — The importance of guarding against fluctuations in the value of gold and silver — India has to bear a serious loss from the depreciation of silver, which must be met by increased economy. 511-529 Digitized by
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