Mr. Felix Schuster, one of our ablest authorities on the
theory of finance, made some interesting remarks on Wednesday in his speech at the half-yearly meeting of the Union of London and Smiths Bank, Limited. He pointed out that there had been a gradual fall in the value of money, which had eased the market by lowering the rate for discounts and loans. This ease might be largely attributed to the increasing gold output from South Africa, and the result was a great decrease of our foreign indebtedness. If the South
African output continued, rates would continue low, unless checked by some sudden local demand for gold, as, for example, if some country should decide to create a gold standard. The practical result would, of course, be in time the depreciation of gold, and a consequent rise in prices, unless there appeared concurrently an increase in production of commodities and the issue of securities.
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