THE EXCHANGE PROBLEM.
(To THE Eerroa or rim " Secoreroa."l
Sia,—For thirty years past, while our exchanges with 800,000,000 of Asiatios have followed the route of the Gadarene swine, the Spectator has allowed an occasional squeal to be heard from a few of the submergers. Look at our experience of the exchange of the Shanghai tael. From purchasing our sovereign (and thus our goods) with 3 Melo pre-1873, the cost of the sovereign in Male rose to 8, and has now in three years reverted to 3 teals (600. an ounce silver). With silver at its new exchange rate Asia can far more than compensate our trades for the war-shrink in Europe's demand for our goods. Next I pray you mark the wonderful object-lesson of the last few weeks. The sterling exchange on New York has fallen from its normal four dollars eighty-seven cents for the sovereign to at most four dollars eleven cents—say 16 per cent. by contrast with the Asiatic fall of 60 per cent. In the calcium light of the trade returns cabled to-day (August 25th) to the Daily Telegraph by their able New York correspondent, judge of what has happened in forty years to Europe's exports to and imports from Asia : " American exports are only $570,000,000 for July, nearly $350,000,000 lees than in June; while imports were the largest in the history of the country, reaching a value of $345,000,000, or $50,000,000 greater than in June."
If a fall of 16 per cent. has results so remarkable as this, there is much to be said for our view that the whole social uplift of the white race has been aborted or transferred to Asia by " cheap silver "—by silver deliberately cheapened in our Western Legislatures. I admit, of course, that America's exports have been trapped by the fall in quite other exchanges than sterling—for example, the franc and the lira—but that does not reduce the value,of the object-lesson of which we have for forty years so blindly disregarded every warning.
The Yokohama Chamber of Commerce in 1894 memorialised the London Chamber: the concluding words are these:—
"Already under the influence of cheap silver a large proportion of the trade east of Suez is finding for itself new channels which will gradually be closed to Western competition."
" Cheap silver," as De Laveleye declared. " is the bed on which Free Trade died." Free Trade involved fixed exchange.
—I am, Sir, ise., MORTTON Fazwsx. Brede Place.
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