DISLOCATED EXCHANGES FURTHER CONSIDERED 371 largely as a money metal, for coinage into rupees. It was the movement of silver to India and its connection with rupee ex- change that constituted the main phenomenon and the con- spicuous phenomenon. I do not propose to undertake any detailed examination of this much discussed episode. Its general character is well known. The balance of payments was such that both silver and gold moved to India. When they reached India, both were largely hoarded. So far as hoarded, they did not enter the circulating medium, did not affect prices, signified nothing further in regard to international trade. The silver, however, was chiefly coined into rupees; and tho even the rupees went freely into hoards, the volume of the active money did increase, and domestic prices did tend to rise. But the rise was slow, so slow as to be observ- able only over a series of years. The vast extent of the country, its enormous and immobile population, the sluggish character of its entire economic life, made it possible for marked changes to take place in international transactions with much retarded effects in domestic trade. Thru long periods foreign exchange, imports and exports, and the prices of imported and exported goods, could vary as if they were quite in a realm of their own, separated by a wide gulf from the prices of Indian domestic goods and from the money incomes of the great mass of people. Within the sphere of international trade, however, there was close interdependence. Imported and exported goods were directly and immediately affected. The gold price of an Indian commodity in Great Britain, its silver price in India, the rate of rupee exchange, and the price of silver bullion — all were tied together. And so as regards the silver price of a British commodity in India. If rupee exchange and the price of silver bullion became low — if many rupees could be got for a pound sterling — the silver prices of exported goods would rise in India and exports would be stimu- lated. Thereafter, with the increase of Indian exports, the gold prices of those goods would begin to fall in Britain, and rupee exchange would begin to be readjusted. And it is clear that a