Stabilizing the Dollar: A Plan to Stabilize the General Price Level Without Fixing Individual Prices

Macmillan, 1920 - 305 ページ

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283 ページ - Both Principal and Interest to be paid in the then current Money of said STATE, in a greater or less SUM, according as Five Bushels of CORN, Sixty-eight Pounds and four-seventh...
292 ページ - Such schemes for a tabular or average standard of value appear to be perfectly sound and highly valuable in a theoretical point of view, and the practical difficulties are not of a serious character. To carry Lowe's and Scrope's plans into effect, a permanent government commission would have to be created, and endowed with a kind of judicial power. The officers of the department would collect the current prices of commodities in all the principal markets of the kingdom, and, by a well-defined system...
83 ページ - Except the dollar, none of the old rough and ready units are any longer considered good enough for modern business. The dollar is the only survival of those primitive crudities. Imagine the modern American business man tolerating a yard def1ned as the girth of the President of the United States! Suppose contracts in yards of cloth to be now fulfilled which had been made in Mr. Taft's administration!
95 ページ - But, it will now be asked, what criterion is to guide the Government in making these changes in the dollar's weight ? Am I proposing that some Government official should be authorized to mark the dollar up or down according to his own caprice? Most certainly not. A definite and simple criterion for the required adjustments is at hand — the now familiar " index number
98 ページ - ... the index number remains below par the now too heavy dollar will be unloaded and the purchasing power of the certificate brought down to par. Thus by ballast thrown overboard or taken on, our index number is kept from wandering far from the proper level — that is, from the price of one dollar per composite basket of goods. In short, the adjustment, like all human adjustments, takes place "by trial and error.
173 ページ - ... renewing loans, and with the prospect of falling prices, tended to press their goods on a weak market. The result was a decline in general prices in the home market which, by checking imports and stimulating exports, corrected the adverse trade balance which was the primary cause of the difficulty. " When apart from a foreign drain of gold, credit at home threatened to become unduly expanded, the old currency system...
88 ページ - By all means let us keep the metal gold for the good attributes it has — portability, durability, divisibility, salability — but let us correct its instability, so that one dollar of it will at all times buy approximately that composite basketful of goods. Money to-day has two great functions. It is a medium of exchange and it is a standard of value. Gold was chosen because it was a good medium, not because it was a good standard. The...
173 ページ - ... in order to maintain their normal proportion of cash to liabilities and from the general public for the payment of wages and for retail transactions. In this case also the demand for such currency fell upon the reserve of the Bank of England, and the Bank was thereupon obliged to raise its rate of discount in order to prevent the fall in the proportion of that reserve to its liabilities. The same chain of consequences as we have just described followed and speculative trade activity was similarly...
100 ページ - Government, a small fee, corresponding to what used to be called "brassage," should be charged to depositors of gold, and no single change in the dollar's weight should exceed that fee. This is a technical detail and, with other technical points, such as the status of the reserve behind the gold-dollar certificates, the initial par of the index number, the selection and revision of the items making up the composite dollar, the possible retention of gold coins and coinage, etc., need not here be entered...
83 ページ - All these units of commerce have passed through the evolution from the rough and ready units of primitive times to the accurate ones of to-day, when modern science puts the finest possible point on measurements of all kinds. Once the yard was defined, in a rough and ready way, as the girth of the chieftain of the tribe and was called a gird. Later it was the length of the arm of Henry the First, and still later the length of a bar of iron in the Tower of London.