───────────────────────────────────────────────────────────────── 1887 91,804 35,354 53,406 618,146 ───────────────────────────────────────────────────────────────── 1888 113,451 44,643 69,486 652,404 ───────────────────────────────────────────────────────────────── 1889 128,907 35,720 70,265 557,004 ───────────────────────────────────────────────────────────────── 1890 141,950 37,869 59,496 633,606 ───────────────────────────────────────────────────────────────── 1891 169,253 27,971 67,666 595,258 ───────────────────────────────────────────────────────────────── The causes which effected such trade disturbances formed the subject of a heated controversy.¹⁸⁸ The point in dispute was whether the changes in international trade such as they were, were attributable to the monetary disturbances of the time. Those who held to the affirmative explained their position by arguing that the falling exchange gave a bounty to the Indian producer and imposed a penalty on the English producer. The existence of this bounty, which was said to be responsible for the shifting of the position of established competitors in the field of international commerce, was based on a simple calculation. It was said that if the gold value of silver fell the Indian exporter got more rupees for his produce and was therefore better off, while by reason of the same fact the English producer got fewer sovereigns and was therefore worse off. Put in [pg 107] this naïve form the argument that the falling exchange gave a bounty to the Indian exporters and imposed a penalty on the English exporters had all the finality of a rule of arithmetic. Indeed, so axiomatic was the formula regarded by its authors that some important inferences as to its bearing on the trade and industrial situation of the time were drawn from it. One such inference was that it stimulated exports from and hindered imports into the silver using countries. The second inference was that the fall of exchange exposed some English producers more than others to competition from their rivals in silver-using countries. Now, can such results be said to follow from the fall of exchange? If we go behind the bald statement of a fall of exchange and inquire as to what determined the gold price of silver the above inferences appear quite untenable. That the ratio between gold and silver was simply the inverse of the ratio between gold prices and silver prices must be taken to be an unquestionable proposition. If therefore the gold price of silver was falling it was a counterpart of the more general phenomenon of the fall of the English prices which were measured in gold, and the rise of the Indian prices which were measured in silver. Given such an interpretation of the event of the falling exchange, it is difficult to