has been fairly overshadowed by the evidence of the disappearance of the gold supplies of the Occident among the scores of millions of the Indian Peninsula. Near the close of the Seventeenth Century a Frenchman, Bernier-a traveller whose observations in the Orient were so esteemed that the great French finance minister, Colbert, asked of him a report on the commercial relations of India-published a book of travels in which he tersely and vividly summarized this immemorial characteristic of the Orientals: "The gold and silver of the world, after circulating for some time, finally flow to India, as into an abyss from which there is no return."

Dr. Soetbeer estimated the net flow of gold to the East (a distinct loss to the monetary uses of the West) from 1851 to 1885, both years inclusive, at 660,000 kilograms, or $438,636,000, a yearly average, say, of about twelve and one-half millions. Last year the net imports of gold by India were nearly $100,000,000! In the last ten fiscal years (according to the official returns of the Indian Government) the overseas imports and exports of gold (the movement by land is negligible) for private account were as follows, the figures used being given in Rx (that is, tens of rupees):

Taking the exchange value of the rupee at $0.32433 in United States currency, the foregoing totals are equivalent to

$579,410,780 imports and $122,760,131 exports, an excess of imports over exports of $456,650,649, or at an annual rate nearly four times what it was only about a quarter of a century ago. The annual average represents approximately one-tenth of the world's gold output. The last two years, however, average about one-sixth of the total production of the world. The foregoing table shows that gold exports have been virtually stationary through the decade while, with the exception of the fiscal years 1906 and 1909, there has been a largely rising ratio of imports. In fact, the net imports in the last five years were 58.60 per cent. of the total amount for the ten-year period. Nor has this great increase in the importation of gold been at the expense of the silver absorption. In the same ten years the silver imports have been equal to $363,025,452; exports $105,849,840; excess of imports $257,175,612. To make more vivid the expansion in gold absorption in the last two years, it may be stated that in the fiscal year ended March 31, 1911, the net imports were equal to $77,760,063,* compared with $70,279,103 in 1910 and with a yearly average for the first half of the decade of $37,813,165. Taking up the record from where Dr. Soetbeer left it in 1885, we shall find that the net import of gold into India has grown as follows in the last quarter of a century:

Nor is there any prospect that this drain of gold to India will fail to expand in the future. From the latest report of Mr. R. W. Gillan, Comptroller-General and Head Commissioner of Paper Currency for the Government of India, we may take figures exhibiting the almost uninterrupted growth in the balance of merchandise trade in favor of the British Dependency in the

* Unofficial figures for the calendar year 1911 give the net gold imports at £20,909,442.

last five years (in rupees): 1907, 686,100,000; 1908, 474,600,000; 1909, 317,600,000; 1910, 706,700,000; 1911, 797,800,000. In terms of our currency, the total favorable trade balance for the five years was $967,411,524, or an average of nearly $200,000,000 a year. The net imports of gold during that period were $267,584,824, or a yearly average of $53,516,965. India's favorable trade balance in the fiscal year ended March 31, 1911, was $258,750,474, compared with $187,809,479 in 1906, an expansion of $70,940,995, or 37.77 per cent. Besides the net imports of treasure, the enormous trade balance to which attention has been directed has been settled by private remittance, bills of the Secretary of State for India, and transfer of securities. It is impossible to obtain data on these points to balance the account, and, in fact, the figures are not needed. It is obvious that, save in years of exceptional famine (and improved internal conditions are minimizing those dreadful visitations) the trade of India will continue to be a magnet to draw British sovereigns by the scores of millions to disappear into the ornaments, hoards and hiding places of the Hindu princes and people.

For it is still evident that the remarkable disposition of this great Eastern population (315,000,000 by the Indian Census of 1911) to hide away the treasure it imports or to melt it down for purposes of ornament and decoration has not yet yielded to the teachings of civilization. It is true that to some extent the sovereign has gone into circulation in parts of India, but in the main that country's gold importations disappear from monetary service. The old order changeth not. Referring again to Mr. Gillan's report, we shall find a most interesting discussion of this matter of gold absorption. He takes the Government receipts as a good index of the extent to which the sovereign has become a medium of exchange, showing these almost stationary figures of the receipts of gold at the Indian treasuries in recent fiscal years: 1907, £2,838,000; 1908, £4,409,000; 1909, £2,748,000; 1910, £945,000; 1911, £3,177,000. In five years the receipts of gold have increased but £300,000! Applying a more drastic test, he presents these figures of the gold entering into the receipts at the Post Offices and Railways of India:

To quote Commissioner Gillan's own comment on this showing: "The inference appears to be unfavorable. If sovereigns have established themselves in the currency the effect should be cumulative. Year after year a certain amount of gold has been passed out into circulation, and if it stayed there we should expect a progression in the figures, but of such progression there is no trace." Elsewhere, analyzing in detail the reports from the various Presidencies and Provinces as to the use of gold as currency he says: "It "It appears then that the acceptance of sovereigns is not yet general."

The statistics for the calendar year 1911 indicated a net importation of gold by India of nearly £21,000,000. The unofficial returns for the first five months of 1912 aggregated £16,650,265, compared with £11,657,557 in the corresponding five months of 1911. One of the most prominent London bullion brokerage firms (nor is it aliunde to note that the head of the concern-Lord Swaythling-has a brother who is the UnderSecretary of State for India for Great Britain) commented in its market letter, prior to the receipt of the official figures, on this point as follows: "We have frequently drawn attention to the vastly increased importation of gold-coined and uncoined -into India. It would be surprising if the net imports of gold into India during 1911 did not prove to be a record. If so, their continuance on such a high scale-taken in conjunction with the absorption by Egypt, which is also very large-will point toward an insufficiency rather than a redundance of the world's supplies of gold."

If we were to construct a table (after the fashion of Dr. Soetbeer's in his Materielen) of the probable disposition of the world's gold supply in 1910 (we shall use this year because

*For second half year only.

nearly all the estimates for 1911 are subject to important revision), we shall find a result approximating the subjoined exhibit, United States Mint data being used except in the abrasion loss estimate and the Eastern absorption, and with ten per cent. allowed for underestimate of output:

Total assumed production

Loss of recorded production by abrasion and

accident, one-half of one per cent...

$454,703,900

45,470,390

$500,174,290

2,273,519

Assuming the population of the Western world (the countries where gold is a dynamic monetary force) to be 700 millions, here would be a year's addition to the supply for circulation and bank reserves of less than fifty cents per capita! But we are confronted with the records of the world's Mints, showing in 1910 an output of coins (less recoinage from old coins or old material) amounting to $428,568,566.

Deducting thirty

five per cent. as representing the drafts on coins in the industrial consumption, we should have a net industrial consumption of bullion amounting to $77,251,525, which, if deducted from the $497,900,771 net gold production available, would leave a balance of $420,649,246 bullion available for coinage, or an apparent excess of nearly $8,000,000 in the out-turn of the Mints over the available production of 1910. The strain on the theoretical "latent reserve" in the year named therefore was nearly two per cent. of the available production, and little accords with the idea that there is so liberal an amount of new gold brought