It may rightly be asked how such results could be obtained by having silver as the standard. It may further be argued, that the tendency of silver is to depreciate in terms of gold, and China sticking to silver is not going to help any. There is a very minute distinction between the depreciation of silver and the depreciation of silver in terms of gold. The depreciation of silver means the reduction in its purchasing power of commodities, which is really of greater importance than the depreciation of silver in terms of gold, which only means that gold became valuable in terms of silver. People confuse the issue, by taking the depreciation of silver as synonymous with the fall in the gold price of silver. What has happened for the past two decades, up to the latest war, is that gold has become less valuable in terms of commodities, or in other words there has been a general rise in prices. The effect on silver has been as follows: in countries where all prices are in gold the ratio between silver and gold has been gradually falling; on the other hand, in countries where prices are in silver the position has been affected, and not even fully, only with regard to goods with gold prices. Consequently in China the depreciation of silver in terms of gold has not been followed with a rise in prices to the same extent as in Europe, or in countries having a gold or gold exchange standard. On the other hand, it has brought about a better adjustment of the trade balance by contributing to a large increase in export of commodities, because the gold price allowed of a larger profit to local producers. If the gold or the gold exchange standard were introduced into China the first effect of it would be to dislocate this trade altogether, because of the reduction in the margin of profits to the exporter.