How then, it may be asked, would such a steadying influence be brought about? Ever since the demonetization of silver by European countries, up to 1892, when the free coinage of silver by the Indian mints was stopped, India and China were the sole controlling factors with regard to the value of silver -although, of course, the large purchases for arts in Europe and America had also a large say in this question. The mistake is often made that these countries did not have such an influence as is claimed for them, as their annual purchases were not a very large proportion of the output; it is due to the fact of people not reckoning upon the accumulated national wealth of these countries, which has remained, and does still remain, in silver. Since the adoption of the gold exchange standard by India, China became the only important country which has had any permanent say in the regulation of the relative values. This is not done by actual silver purchases, and is effected mainly through the medium of trade. Every penny worth of exports has to be paid for in silver in China or, otherwise, the accounts have to be adjusted in silver. Naturally the buying countries, which are Europe and America, have to convert their gold money into silver before they settle accounts. There is thus created a demand for silver, without any reference to the actual output of the silver mines of the world. But conditions have been such in China that she has always owed more than she received; consequently the adjustment of accounts always left a balance in favour of the gold countries. The result has been a gradual depreciation in the value of silver - although, of course, it is necessary to guard against any assumption that the trade situation in China was the only cause of the steady fall in the value of silver.

Now, it is a point worthy of inquiry as to how the adoption of a uniform currency in silver will help. The efforts of the Chinese ought to be directed towards the improvement of the sale of their produce. Such efforts would be successful only if there is stability of prices in this country, as is general in other parts of the world. Various currencies have been responsible for the fluctuating values, which have remained the bane of trade in China. A uniform currency would steady prices, and help trade in exports. The more the trade in exports and the more the balance of trade grows to be favourable to China, the higher will be the price of silver. Of course, there is a possible limit both to exports and to the rise in silver. At a very early stage, the probability is all in favour of the trade adopting a mean which would bring about an equilibrium in the trade. Thus the effect of the proposed change would be not only to increase the level of silver values but also to keep it fairly steady.