A bounty to the Indian producer and a penalty to the English producer, it is obvious, could have arisen only if the fall of silver in England in terms of gold was greater than the fall of silver in terms of commodities in India. In that case the Indian producer would have obtained a clear benefit by exchanging his wares for silver in England and thus securing a medium which had a greater command over goods and services in India. But _à priori_ there could be no justification for such an assumption. There was no reason why gold price of silver should have fallen at a different [pg 109] rate from the gold price of commodities in general, or that there should have been a great difference between the silver prices in England and in India. Statistics show that such _à priori_ assumptions were not groundless. It is obvious that if silver was falling faster than commodities, and if silver prices in India were lower than silver prices in England, we should have found it evidenced by an inflow of silver from England to India. What were the facts? Not only was there no extraordinary flow of silver to India, but the imports of silver during 1871–93 were much smaller than in the twenty years previous to that period.¹⁸⁹ This is as complete a demonstration as could be had of the fact that the silver prices in India were the same as they were outside, and consequently the Indian producer had very little chance of a bounty on his trade. ¹⁸⁹ Cf. figures for imports of silver in Chap. I. It will, however, be noted how closely the flow of silver into India between 1872 and 1893 followed the fall in gold price of silver. Although such must be said to be the _à priori_ view of the question, the Indian producer was convinced that his prosperity was due to the bounty he received. Holding such a position he was naturally opposed to any reform of the Indian currency, for the falling exchange which the Government regarded a curse he considered a boon. But however plausible was the view of the Indian producer, much sympathy would not have been felt for it had it not been coupled with a notion, most commonly held, that the bounty arose from the _export trade_, so that it became an article of popular faith that the fall of exchange was a source of gain to the _nation as a whole_. Now was it true that the bounty arose from the export trade? If it were so, then every fall of exchange ought to give a bounty. But supposing that the depreciation of silver had taken place in India _before_ it had taken place in Europe, could the fall of exchange thus brought about have given a bounty to the Indian exporter? As was explained above, the Indian exporter stood a chance of getting a bounty only if with the silver he obtained for his produce he was able to buy more goods and [pg 110] TABLE XXI _Movements of Prices, Wages and Silver Between India and England_¹⁹⁰