THE FOREIGN EXCHANGES 241

exports, and the British goods imported into India, preserved
a tolerably constant average price-level in Indian currency,
while in England they fell in price. The former of these
movements is sometimes referred to as indicating a profit on
export from India, at the end of the period, measured by the
difference in the rate of exchange in 1873 and, say, 1893.
But the rate of exchange moved because the price movements
of the two countries were independent, and its movements
practically express the change in the comparative level of
prices in India, quoted in rupees, and in England, measured
in pounds sterling. The fall of exchange (making English
money cost more in India) may have afforded a stimulus to
export, but this was constantly nullified by the fall in the
prices realised in England for Indian goods. In such cases
as are mainly considered in this chapter, the movement of
exchange to specie point indicates a change in price-levels,
which change is counteracted by the effect of bullion shipments
 on the money supplies of the two countries. The
divergence is thus corrected by a reduction of the price-level
where it stands relatively high, and a rise where it stands
relatively low. As has often been said, the prices of commodities,
 which enter into the trade between any two
countries, cannot remain permanently at levels differing by
more than the cost of transference from the one country to
the other. When an abnormal difference of price affects
particular commodities, a movement of those commodities,
or a restriction of a movement when such movement is
normal, may provide the needed correction. When, however,
the abnormal difference is one affecting a considerable range
of commodities commonly exported or imported, an influence
is needed which will operate widely. The general level of
prices in the wholesale markets is affected by international
Sullion movements, and the restoration of the normal relation
of price-levels in different countries is thus effected. Changes
in facilities for transportation bring within the influence of
‘hese movements commodities which were not so formerly.
In this way some price-changes, of importance to individual
countries, occur which are not accompanied by a correspondingly
 marked price-change in other countries. Retail prices
16