Let us take the case of the exporter. We will suppose that A. Blank & Company, of Manchester, calico printers, send goods to Shanghai, which they hope to sell there for a total sum of, say, L1,000. The price of silver when the shipment was despatched was, we will say, 25_d._ per standard ounce, and on this basis A. Blank & Company have calculated the selling price which is to yield them L1,000. By the time the calico arrives in Shanghai, the gold price of silver has dropped, we will suppose, to 20_d._ per standard ounce, and this obviously indicates that the manufacturers will receive one-fifth less for their wares, since they are paid in the currency of the province (taels in this instance), and when Blank & Company's money comes to be converted back into British gold pieces, they are face to face with the fact that the outturn is L200 less than they had calculated: they have lost one-fifth, and receive L800 only. This is, of course, an extreme case, as in the ordinary course silver would be unlikely to drop 5_d._ in the period between shipment and arrival of the goods in Shanghai; but whatever the fall, the principle is the same, and the illustration serves to show exactly what happens. It is not only the British exporters who stand to lose in the lottery of trade with countries which have an unstable silver exchange; the capitalist also, and every class of investor, is liable to be adversely affected in operations with silver standard countries. The rate of exchange between such countries and gold standard countries is plainly the exchange between gold and silver; therefore, if a person has invested in undertakings in the silver country, when he receives his dividends in the currency of that country, he will obtain less for his dividend warrant on the London market in proportion to the fall in the price of silver--assuming that it does fall. Conversely, he may reap a higher return on his investment if silver has gone up before the encashment of his dividend. Finally, the principal is affected in the same way, whenever it is desired to convert it back into gold. A further example will show how this works out in practice. We may assume that an investor, encouraged by the chance of earning 6 per cent. on his money, remits to China L1,000. The price of silver on the 1st January, 1914, was 26-7/16_d._ per ounce standard; on the 31st December, 1914, 22-11/16_d._ For the sake of argument, we will imagine our investor sent the money out to the Eastern country on the 1st January, 1914, but circumstances made it advisable for him to recall his money at the end of December in the same year, when the metal had depreciated to 22-11/16_d._; in converting his principal back to British currency he will find himself faced with a sharp loss. Silver, in which the investment stood, has dropped 3-3/4_d._ of its gold equivalent, roughly, one-seventh; consequently on conversion the gold value of his original L1,000 has fallen to about L857....