But, it might be said that, as the variation in the price of silver does not altogether depend on Chinese trade and Chinese Government payments, the regulation of exchange by such means could not go very far. There is certainly a modicum of truth in such an argument; but I contend that in any case the Government could do a great deal to keep exchange steadier than would be the case otherwise. The greater portion of the output of silver goes into consumption by the arts; the next largest proportion goes to India and China; and the balance is taken by the European countries and America for token coinage. Supposing there was a great paucity of demand from India, or from other countries, and silver was dropping in value; China could then buy a portion of the stocks and thus relieve the market, incidentally helping herself by keeping up the value of the white metal. The cost of keeping the stocks for a time would be much less than the losses incident upon a heavy fall in value and consequent dislocation of trade in China; it must, however, be understood that it rarely happens that stocks of silver remain unsaleable for any length of time. Or take an alternative example - as in 1906/1907 or 1911/1912, when the Government of India was a heavy buyer in the market; prices went up to an unnecessary extent, and the dislocation of the export trade of China was ruinous. On these occasions China was powerless to do anything; she, however, profited in having to pay less in the shape of indemnities, interests, etc.; but such profit was at the expense of the general prosperity of the people. In China trade, as in no other trade, a steady exchange is much more valuable than anything else. At the time when the Government of India was buying heavily, if China had a proper currency, she could have thrown a good deal of her silver stocks on the market and steadied prices. If there had been a mechanism for keeping reserves in London she could have received gold in London for the silver shipped from Chinese ports, and when prices came down bought back the necessary quantity of silver at favourable prices; thus a big profit might have accrued to the Government, while the dislocation of trade would have been reduced to a minimum.