386

INTERNATIONAL TRADE

i.

a
od

for a time panic-struck. Before long the panic proved to have been
little less than foolish, and the episode was almost forgotten, tho
the precipitate legislation to which it led was kept on the statute
books for an indefinite period.
In support of the view that the process of depreciation brings
about an export bounty it has been urged that there is one circumstance
 which in itself brings about that result: the failure of
wages to rise as fast as prices. No doubt it is true that often
enough, tho not universally or inevitably, money wages do fail to
rise as fast as the prices of goods. So long as the discrepancy lasts,
the business class gains thereby. Profits rise and business booms.
And this presumably extends to the exporting industries. Foreign
exchange rises with everything else ; the producer of exported goods
receives more money for the same quantity of goods; his expenses
in the way of wages fail to rise as much; he gets an extra profit, or a
“bounty.”
I submit that all this, however, shows merely that the exporter
gains as much as do others who are in business ; not that he gets any
profit different from that which accrues elsewhere. There is nothing
 to give a special fillip to the export industries. There may be a
bounty for the business class at large, but there is no special bounty
for the exporters. And only such a special bounty would serve
to increase the volume of exports.
The situation, I may remark, is different with the other type
of dislocated exchanges — silver exchange. Here a special gain for
the exporters presumably appears. If there occurs, in a country
having a silver standard, a rise in exchange on gold countries — in
India, say, arise in sterling exchange — the bounty on exports will
arise. It will arise, that is, from the mere fact that in the world
market the gold price of silver has fallen. In the silver country
the prices of goods in general will not be affected ; there is nothing
in the lower prices which silver fetches in gold countries that will in
itself change the price level of the silver country. But the prices
of its exported goods will be affected at once. They will advance
in correspondence (more or less complete) with the advance in
foreign exchange. I will not add to what I have already said,