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succour from England to supply the drain from India, and otherwise aid the invading force.

Much has been said of late regarding the attitude of France, and her Persian policy has been canvassed and called into question. It must be remembered that while this powerful nation is our ally, she must, by the force of circumstances, also be our rival. We trust that she is a generous one, and that, in seeking her own benefit, she does not act to the detriment of England. She may be indifferent to Kars, and secretly smile at our contretemps in Persia; but for her own particular credit her Envoy would never allow the Shah to suppose that Russia was victorious in the late war. The more M. Bourrée secures the influence of his country in the councils of Persia, the more surely will the prowess of M. Bourrée's countrymen receive the “afrin” of the Persian people. We feel confident that no Russian diplomacy will cause the French Envoy to bate one jot of laudation for the valour which won the Malakoff! England and France were together. The former, in the absence of a representative to sing her poeans at Teheran, may be thrown into a temporary shade at the Asiatic court; but her European and Christian ally would never allow that the treaty of Paris was other than favourable to the common cause. In like manner, too much stress may be laid upon the loss of Kars as prejudicial to England. Kars was essentially a Turkish garrison; and the handful of Englishmen who defended it-while they did wonders to enhance the renown of British individual valour-could not be supposed to identify it so completely with the interests of their country as to make its loss quite fatal to British prestige in Asia Minor.

We confess to misgivings as to the policy of the Persian invasion. All honour to General Stalker and his gallant force for the capture of Bushire, but we cannot forget the warning from the then highest authority regarding our first successes in Afghanistan, that our "difficulties would only then commence.

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We have every confidence in the General commanding in chief what is possible to be done, he will be certain to accomplish; but we are apprehensive as to the value of aggressive operations from the Persian Gulf at all.

There is another quarter in which Persia is vulnerable, and from which a main object of the war would, we think, be more promptly secured. Our readers will readily understand us to mean the marching of a force through the Bolan to effect the

recapture of Herat. There is another name of which the Bombay army may well be proud. And we feel certain, that were the distinguished officer, recently gazetted to the command of the cavalry division of the Persian expedition, to be sent in command of an independent force to operate at Candahar and Herat, England and India would be satisfied that, with Outram and Jacob placed at the head of armies thoroughly equipped and organised, Government had taken the best measures for securing the successful prosecution of the war, and the accomplishment of the objects for which it has been entered upon.

THE

BOMBAY QUARTERLY REVIEW.

APRIL, 1857.

1.

2.

ART. I.-THE SILVER QUESTION AS REGARDS

INDIA.

The External Commerce of British India during two periods of years; namely, the eight years (ended 30th April) 1834-35 to 1841-42, and the five years 1849-50 to 1853-54. By Colonel SYKES, F.R.S. (Read before the Statistical Society, 21st January 1856, and reprinted from their Journal.)

"Times" City Articles on the Drain of Silver to India and China, in connection with the monetary crisis in France. "Times" of 18th, 19th, and 20th September 1856.

AT a time when Australia and California are counting the gold which they continue to pour in an ever-enlarging_stream upon the markets of the world, by tons instead of dollars or pounds sterling, the financiers and merchants of the principal nations of Europe are puzzled and alarmed by the mysterious disappearance of the precious metals from the currencies and Bank Reserves of their respective countries. The importations of gold at Liverpool and London often reach the almost incredible amount of half a million in a single week, but yet there is no superabundance of gold in England. Most part of the precious stream is diverted ere it arrives at the coffers of the Bank of England, and what does get there, barely suffices to replace the daily drain and sustain the supply of bullion at its proper level. This strange state of affairs is not, however, inexplicable. Continental Europe is in greater want of gold than England is, and is

VOL. V.NO. II.

29

willing to pay a higher price for it. The Bank of France buys up at a heavy premium all the gold it can lay hands on, and Hamburgh bids even higher than Paris. The vast and varied commerce of England supplies the wants of the gold countries, and draws to herself the lion's share of their precious produce; but England needs only a limited portion of this for her own requirements, and is therefore ready to distribute the remainder among the nations of the world, in exchange for commodities of which she is more in want. England covets the wines and silks of France, the corn and tallow of Eastern Europe, the cotton and indigo of India, the teas of China; and in the gold she has fortunately an article which obtains for her all these. Why then should we view with alarm the constant drain of gold from England? This is no misfortune, but a positive advantage. The bullion does not stay, because foreign countries tempt our capitalists to part with it by the offer of a higher profit than is to be obtained from its employment at home. The intensity of their demand is an index of the profit which England is deriving from the sale of her gold. The price of money or the rate of interest may be high in England, but it is higher still abroad, and our manufacturers have therefore nothing to fear from the competition of foreign producers. The capitalists of our country are now reaping a rich harvest by the sale of gold to foreign countries, while the prosperity of trade and manufactures, and the thriving condition of all classes of the community, most surely indicate that England in reality suffers nothing from the present drain of the precious metals.

But how is it that the continental demand for gold is greater than when the entire produce of the mines of the world did not exceed a third part of the supply now received by England alone? This may be partly explained by the heavy export of the precious metals to the coasts of the Black Sea during the late war, for the support of the mighty armaments that were there contending for the guidance of the destinies of Europe; by an uneasy feeling abroad among the people of the continent, which saps the confi dence of the timid in the existing order of things, and induces them to hoard their savings rather than embark them in industrial undertakings; by an impulse in a contrary direction, given to speculation of all kinds in France; by the measures of the Emperor Napoleon for expanding credit and according support to novel enterprises; by a demand for capital in Eastern Europe to create railroads and steam-fleets, and give effect to other gigantic schemes set on foot by the Governments of Russia and

Austria, on the return of peace; and lastly, by the extraordinary amount of silver exported to India and China in liquidation of the heavy balances of trade due to these countries, in consequence of our unusually large importations of their productions, induced by the shutting up of the Baltic and Black Sea trade during the late war, and the recent failure of the silk crop in France and Italy.

It is to this drain of silver to the East, and more particularly to the silver question as regards India, that we purpose to limit our remarks upon the present occasion. India has greatly benefited by the late war, in consequence of which her foreign trade received a most remarkable development. This development has extended to both exports and imports, but to the former more conspicuously, and owing to this the balance of trade requiring to be liquidated in bullion has become greatly augmented. But the precious metals thus largely imported by India are not again exported. Unlike England, which buys gold and silver to sell them again for other articles of consumption, India appropriates nearly all the gold and silver that she buys. The demand of India for the precious metals, and the tenacity with which they are held when obtained, was also a notable peculiarity of her commerce in ancient times, and induced Pliny to style India "the sink of the precious metals." Colonel Sykes, the present Chairman of the Court of Directors, in his paper quoted at the head of this Article, has considered this fact to be at once so strange and alarming as to make it desirable to warn the commerciaal communities of nations of the bullion-exhaustive process of Indian trade, with the view apparently of inducing them to be cautious in endeavouring to develope it beyond its present limits. And impressed with the danger of this exhaustive process, he has reasoned himself into the singular conclusion that so far from the "Indian Tribute," or the home charges of the East India Company, now amounting to about four millions sterling, being injurious to India, it has proved of the utmost benefit by lessening the amount of bullion exports from England, and to that extent relieving commerce and the money market.

The object of Colonel Sykes's paper, as he himself tells us, is to demonstrate the fact of the balance of trade being constantly in favor of India; and the still more remarkable fact of the constant absorption of the precious metals by India." But there is surely nothing so very remarkable in this, for it is table condition of every country, whether of the East which does not itself produce the precious metals.

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