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which is most to be feared, as the indirect, rather than the direct effect of India's monetary policy, is a heavy appreciation of gold. As I have already said, the general feeling is that this policy will be disastrous to the gold using countries of Europe rather than to India. The trade, manufactures and commerce of Great Britain are so largely carried on by credit, that any appreciation of the standard must naturally inflict far greater injury on her than on any other nation. India also must suffer, but in a less degree; for in linking her currency to the gold standard she takes upon her shoulders to a certain extent, those evils from which the trade and manufactures of Great Britain in common with those of other gold countries have already suffered, although at the same time, the government may be relieved from many of the grave evils which have hitherto oppressed her.

Nearly one-fourth of the land revenue is permanently settled, and of the remainder the greater part is fixed on assessments for thirty years, most of which are of recent date. There can therefore be no alteration in the number of rupees to be paid, however great the appreciation of the rupee may happen to be. In whatever proportion, therefore, the rupee may in future appreciate, in that proportion will the Indian agriculturist have to pay indirectly additional taxation; not, indeed, in an additional number of actual rupees, but in so much additional produce as may be necessary to earn the same number of rupees as before. The new policy has already necessitated an increase of produce amounting to about twelve per cent, for to this extent the rupee has appreciated; and it is impossible to predict the amount to which it may yet rise in future; but it is evident that, as the scramble for gold among the nations increases, so must the rupee now appreciate.

There is another serious difficulty looming in the future. Sir David Barbour has stated that should it be found otherwise impracticable to retain the rupee on a par with gold at Is. 4d. a contraction of the rupee currency will be necessary, which, "if carried far enough, must ultimately restore the

value of the coin." Now anyone who has studied the subject of currency must be aware that periods of contraction of currency always have been, and always must be, periods of depression of trade, distress, bankruptcy, and ruin. Moreover, India, having taken on her shoulders the evils which formerly handicapped her gold-using competitors, will be no longer on equal terms with her silver-using competitors; and her trade with silver-using countries will now be exposed to all the difficulties and drawbacks of a fluctuating exchange.

It is difficult to estimate with precision the alleged dangers likely to occur from the circulation of a serious amount of spurious, but full weight, coinage which might prove to be a very profitable trade. The report of the Indian Currency Committee assumes that to carry out operations on an extended scale expensive and specially constructed machinery will be requisite. It was therefore doubted whether the danger of India being flooded with "a large amount of spurious coin would really be a grave one." On the other hand, the natives are extremely skillful in the manufacture of counterfeit coin, and even a small margin of profit in spurious coinage would be large in their eyes. Sir Charles Trevelyan, in 1864, stated that real gold mohurs, nearly of standard value, were habitually made by forgers chiefly to secure the premium at which they sold. One of these establishments at Jagadree in the Punjaub was on the scale of a mint, and the gold coin had an extensive sale in the protected and hill States.

It should be also remembered that there are no fewer than sixty mints belonging to native States within and adjoining our territory which are either now at work, or would be set in active operation, if sufficient inducement were offered. Moreover, it does not appear that the import of full weight coin (manufactured in foreign countries) could be prevented unless it could be proved that such coins were spurious, a matter very difficult of proof.

There has been an extraordinary inconsistency in the sanction of such a currency. Those who, when the double

standard was under consideration, had previously contended that the proposal to impart an artificial value to money was an economic impossibility, opposed to the laws of supply and demand, have now sanctioned a proposal for artificially raising the value of silver coin in the worst and most mischievous form; and they have quoted, as precedents, the results of the "limping" system in different countries to prove that the currency of over-valued silver and inconvertible paper has been able,-by means of legislative action and the restriction of the coinage,-to maintain a fairly steady parity of exchange with gold-using countries.* They appear to have been blind to the fact that, whilst this is an artificial raising of the value of money by legislation, at the cost of appreciating the standard, and contracting the supply of currency (two conditions fatal to the prosperity of any country); the adoption of the double standard which they have condemned is not in reality an artificial raising of price, but simply a maintenance of equilibrium by means of the natural demand set up for each metal (as money), working through the ordinary laws of supply and demand; a currency based on the market price of bullion, and one that admits free play to a healthy expansion.

The double standard is in perfect accord with sound economic laws; but the artificial raising of the value of the rupee is opposed to them, and, being a violation of all monetary laws, must, sooner or later, end in disaster. It is that forced elevation of the value of money which Bentham, in his "Principles of the Civil Code," denounced as a "fraudulent bankruptcy" and a "foolish fraud."

Bexley, Kent.


* How far this parity can be maintained in times of financial crises or political difficulties is quite another question.

† See foot note to page 14 on the manner in which demand fixes the relative value under the double standard.




Economics has often been considered by many of those who have studied and expounded its laws as primarily the science of exchange, or of value, or of distribution. conception has been a serious stumbling-block to any great or permanent advance in economic knowledge. The science is primarily one of man and not of exchange; and not of a man as static-changeless; but-as he is-changing, progressive. It is the study of man obtaining from nature the "goods" or commodities which appeal to his desires. Thus our science deals not with man alone, or with nature alone; but with man, with his capacities for pleasure and pain, surrounded by that aggregate of phenomena obeying definite laws which we know as the physical world. Economics is but a department of the study of life, and all "life study" involves an investigation of the effect of the environment on the life. Economics is, therefore, a higher biology; it is the investigation of the causes of human progress; it is the science of prosperity.. Darwin studied life in conditions which tend to develop, modify and change physical organs. The economist studies life in conditions which do not tend to develop toes and arms, but which do tend to develop, modify and change capacities for pain and pleasure. Yet Darwin's attitude toward his science, as one who sought the reason of change and development, should be the pattern for the economist, who should turn to man and seek in his nature and in the nature of his environment the laws of human progress.

This paper is an attempt to develop the theory of national prosperity and to bring it into closer relations with the other parts of economic theory. It is thus a discussion and elaboration of a subject in which a fresh interest has been created by the recent writings of Professor Patten, especially by his "Theory of Dynamic Economics," and his paper on the "Economic Causes of Moral Progress" in the ANNALS, Sept. 1892.

Human progress: Human development: These words have an attractive ring. But what is progress? What the test of forward development? Scientific discussion requires that we should reduce our general ideas to definite conceptions. All of us use the word "progress" when applied to human affairs to express one of two sides of the same truth. We say society is progressive when the capacities of its individual members for happiness increase, or we say a society is progressive when by inventions or improved methods of production, the people have more to enjoy. In other words, we apply the term "progress" to a development of character, whereby ultimately the true happiness of society will be increased; or we apply the term "progress" to a direct increase of man's power over nature, whereby he has more "things" to enjoy. In short, whether directly or indirectly, the test of human progress is the increase of human happiness.

It is not our purpose here to enter into a complete or even a partial analysis of the sources of human happiness. But it is important to our purpose to point out that our pleasures have always a dual source, or rather that two elements combine to form all our pleasure, namely, the subjective and objective. By the subjective element we mean man's nature. What we may call his capacity to obtain pleasure from the objects round him. By the objective element we mean that which man recognizes as apart from himself, and which is capable of giving him pleasure. A large source of the objective element is what the economist knows as goods. An economic good, or commodity, in commercial language, is any material substance capable of giving pleasure to man. Since different men like different things, goods to one man may not be goods to another. The capacity of a good to give us pleasure, or our capacity to obtain pleasure from a good, which is the same thing from another point of view, is called its utility.

While everything material which has the capacity to give us pleasure is a "good," everything which is a good has

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