CO129-316 - Governor Sir Blake - 1903 [1-4] — Page 594

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favour of a gold standard at the meeting of the Chamber of Com- merce held on 19th February, 1903, but am still or the opinion that it would not be to the interests of this Colony, which de- pends so greatly on its trade with China, to have a gold stand ard until that country's currency is also placed on a gold basis.

Mr. Osborne says "One and all admit that a great loss has

taken place in the shrinkage of Capital and in Investments"

he means, of course, measured in gold but I am inclined to doubt

if there has really been any loss. The gold value of the dollar

is certainly less, but supposing a capitalist to have accumulated

today $100,000. worth say 18/8d each, it by no means follows

-

that he would have accumulated as many dollars if the value of the dollar had remained at say 3a/-. On the contrary, the lower

dollars fall in value, the more plentiful they must become and

with salaries and rents double and treble what they formerly

were the easier it must be to accumulate capital in dollars. Let

us suppose a steamship company with a capital of $1,000,000, form-

ed ten years ago. According to Mr. Osborne's statement, this

company would have suffered a great loss by shrinkage of the gold

value of its capital. But nothing of the kind would in reality

have happened for the capital would be invested at once in stea-

mers and as the dollar has fallen in recent years, the dollar

value of steamers out here (or of the plant and machinery in the

case of a factory) has risen so that the shrinkage in the nominal

capital is recovered in the increased value of the company's assets

which are its real capital, (less of course its liabilities).

Farther on he speaks of changing the face value of scrip into

sterling, so it is evidently the nominal capital he is thinking

about. That has, however, been invested in the Company's pro-

perty and no alteration in its face value can make any practical

difference to the shareholders.

Mr. Osborne also says that a depreciated dollar means in-

creased expenditure no doubt,- but increased expenditure has

been met by increased salaries and wages all round, so there again

there has been no actual loss. On the other hand, a depreciated