THE SILVER CRISIS. T HE currency outlook of the world becomes
daily more dark and doubtful. In the first place, it is evident that, though the Indian Government have obtained relief by closing the Mints to free coinage of silver—they can no longer be throttled at will by the holders of silver—they have obtained that relief at what may prove a very heavy sacrifice. As yet, the mass of the population of India have not realised that the man who two months ago had thirty silver bracelets has now only got twenty,—i.e., the worth of twenty ; but when they do, and when the full effect of a currency appreciated by law is felt, it is quite conceivable that India may show very grave signs of dis- turbance. What will greatly add to the trouble is the fact that the Indian peasant, in one way or another, is liable to the making of fixed payments, generally for interest on loans, and that the burden of these fixed payments will be increased by the policy of closing the Mints. Before, when silver fell, the burden of all silver payments fell with it. Now, however, the burden of a sum of rupees payable as interest will remain fixed, though the price of silver, measured in gold, continues to fall. No doubt Mr. Courtney is right in pointing out that the first of these hardships—the depreciation of the silver hoards of the Indian peasant—can easily be exaggerated, and that since many of those hoards are in coined silver, the raising of the price of the rupee will often help rather than injure the ryot. Still, when all is said and done, the fact remains that the Indian side of the silver crisis has been by no means surmounted, and that if, as seems pos- sible, the intrinsic value of the rupee falls to 8d. or 9d., we may need some further means of meeting the difficulty. We say this not because we have come to think that the policy adopted by the Indian Government was other- wise than courageous and sagacious. We fully admit that it was absolutely essential for them to shut the Mints in some form or other. All we wish to insist on is that the public must not consider the Silver problem solved for India. If the outlook as regards silver is black in India, it is still blacker in the United States. The resolute character of the President's Message seems to make it likely that the Silver Purchase Law will be abolished ; that America will cease to make great monthly purchases of silver ; and that in some form, open or veiled, America will become mono- metallic. But as soon as this happens, the pressure on. gold will bo greater than ever, and the demand for silver less, with the natural result that prices measured in gold will fall still more, and that silver, as compared with gold, old will be further depreciated. Now, though dis- inclined as we are to take the side of the bimetal- lists, we cannot think, as Sir William Harcourt appears to do, that the fate of silver is nothing to us, and that England can afford to smile at the trouble of the silver-using countries. The notion that since things have been made snug in India the Silver problem is over for England, is an absurdity. Trade is too essentially inter- national for us to be indifferent to the fate of silver, even granted that we have managed to keep India from getting involved in the crash. Whatever hurts the rest of the world must hurt us, since we sell to the whole of mankind. Take for a moment what is going on in America. Can any .sane man pretend that the disturbance of business, the breaking of banks, the insolvency of great traders, and the general distrust, can have anything but an ill effect on the trade of England P When, then, Mr. Balfour says, as he said at the Mansion House last week, and in the House of Commons on Tuesday, that it behoves us to see if something cannot be done to restore silver to its old place in the currency of the world, we are in agreement with him. That is, in our opinion, not only a perfectly legitimate object, but one which demands the closest attention of our statesmen. His actual words are worth quoting :—" I am convinced," he said, " that this question is one of the first importance to every man in this country ; and, although this is not the occasion—and I should be the last man to make it so—for advocating any particular views of my own as to the way in which we ought to solve the great currency difficulties of the world, it is incumbent upon every man in this House, whatever his convictions may be, to realise that there is a great cur- rency difficulty, and that we ought, in no spirit of pharisaic optimism, to set our shoulders to the wheel and to do what we can to rehabilitate what has been, what ought to be, if we are to remain prosperous, a great measure and medium of exchange in the civilised world--namely, that silver which has been always associated with gold in carrying on the commerce of mankind." A moment's reflection will show how extremely difficult is the position of English men of business who trade with countries using a silver standard as long as silver is liable to still further depreciation. People trade not for the love of it, but to make a profit. The merchant's and the manufacturer's first thought is, If I buy or produce at £5 a ton, shall I be able to sell at Z5i- a ton P' Information reaches him that in the East he can at this moment get for his goods an amount of silver equal to £51- per ton, and he accordingly bargains to do so. By the time, however, that he has sent his goods and got his silver, the price of silver has fallen, and he can bring back no more than £5 per ton. His profit, that is, has disappeared in the fall in exchange. Under such cir- cumstances, who can doubt that while silver is perpetually falling, trade is stopped and injured P Though a steady standard of value is best for trade, a rising standard of smite does not destroy it. A falling standard, however, makes business almost impossible. Whether gold is or is not appreciated we do not pretend to say. But no one, we think, can doubt,—(1), that silver is depreciated ; and (2), that such depreciation is bad for trade.
Whether it will be possible to help silver by Govern- ment action is a very difficult question. Many persons will no doubt declare that Mr. Balfour's appeal to his country- men to do something for silver, is like the episcopal appeal over which Mr. Mathew Arnold made so merry. We are, however, inclined to think that the hope of being able to do something for silver by international agreement is not altogether absurd. Short of bimetallism, a use could surely be found for silver, and we do not see why a new Conference should not be called with a view to discussing this matter. For example, we do not see why the Powers should not agree,—(l), to make silver legal tender up to se10 ; (2), to bind themselves to issue silver coins for discharging debts under £10 at an agreed ratio to gold—these might, of course, be also made the basis of a note-issue ; (3), to let the amount to be coined by each State be equal to at least one year's State revenue. As it would be possible to pay all taxes under £10 in this silver coin, or in notes based upon it, and as there would not be a plethora of it in any country, owing to the agreement as to the amount to be coined, there would be no risk of the silver notes or coins getting depre- ciated, and yet something handsome would be done for silver. We do not put these suggestions forth as in any sense a final or deliberate scheme, but merely to indicate roughly that there are ways of using more silver, short of bimetallism, which are worth discussing. These ways of doing something for silver would have been discussed at the last Brussels Conference but for England, and would have had the support of many Continental monometallists. It was, in no small measure, our refusal to do anything for silver which made the Brussels Conference a fiasco, and brought on the present crisis. M. Adolph Soetbeer, a leading German monometallist, prophesied what would be the result of our action. His words, quoted by Mr. Henry Hucks Gibbs, in the preface to his very able and readable pamphlet, " A Colloquy of Bimetal- lism," are worth attention :—" I fear that if the English Government, on the occasion of the forthcoming Interna- tional Monetary Conference, should refuse to submit or support practicable propositions destined to extend con- siderably the use of silver as legal tender, there will pro- bably result a further incalculable depreciation in the value of the metal and a very serious appreciation of gold, followed by disastrous consequences." As we have said above, the silver crisis is now entering upon its most acute stage. Under these circumstances, we hold that Mr. Gladstone and the Government should think long and carefully before they decide either that there is no need to do anything for silver, or that nothing can be done for silver. The question is, at any rate, one which ought not to be settled off-hand by a joke or a sneer.
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