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Show DEWSlSSIlE .'' I0IT18T10I0 Yale Professor Advocates Plan for Unchanging Dollar Value. Irving Fisher Believes Price Index Number Offers Solution. To standardize the dollar, to make its purchasing price almost invariable, to abolish the evils which arise from an unstable monetary unit, Professor Irving Fisher of Yale university, in the San Francisco Bulletin, advocates the following: follow-ing: measures: Now that the war is over there will surely arise great problems of currency. Among the chief of these will be the problem of more stable monetary units. If a scientific solution of this problem is not found, an unscientific solution is apt to bo tried. Already schemes for currency changes are advanced which would be fraught with danger. The great changes in price level from which the world has so long suffered are cnanges in the purchasing power of money, rather than in the Value of tho general mass of commodities. Our dollar, dol-lar, 25. S grains of gold, nine-tenths fine, is a fixed unit of weight, masquerading as a fixed unit of value. The evils of an unstable dollar are many evils of confusion, uncertainty, social so-cial injustice, discontent and disorder. Those whose incomes are fixed, or nearly fixed, by previous contracts or by law or by custom, suffer most. If v the cost of living doubles, the real power of dollars to purchase a living is cut in two. At the end of this war millions of people peo-ple in the United States will own bonds, war savings certificates and insurance, the total value running into many millions mil-lions of dollars. Any variation in the unit in which savings are expressed affects af-fects the interests of the owner of those savings. "What is needed is to stabilize or standardize stand-ardize the dollar, just as we have already standardized the yardstick. Dollar Is "Yardstick." A stable dollar should always be equivalent equiv-alent in value to a certain amount of commodities. The United States bureau of labor statistics collects price quota -lions which show that, with our present unstable dollar, a given group of important impor-tant commodities costs, now more, now less than a dollar, depending- on fluctuations fluctu-ations in supply and demand, including especially the supply and demand of gold. The figure which indicates each month how the price level rises or falls is the "index number." The gold dollar is now fixed in weight and therefore variable in purch;iing t power. "What is proposed is a gold dollar fixed in purchasing power and therefore variable in weight. The heavier or the lighter the gold dollar, dol-lar, the more or the less will be its purchasing pur-chasing power. It follows that if we add new grains of gold to the dollar just fast enough to compensate for the loss in the purchasing power of gold, we shall have a fully "compensated dollar." But how is it possible In practice to change the weight of the gold dollar? Gold now circulates almost entirely-through entirely-through "yellowbacks," or gold certificates. certifi-cates. The gold itself (often nnt coins at all. "but bar gold.") lies in the government gov-ernment vaults, It would cause little, if any, inconvenience if the only circulation of gold were through yellowbacks, ll us, then, banish gold coins ent irfly from our thoughts and think of a dollar simply sim-ply as a n u m h r of the trr a in? of d bullion in the t reas u ry va ui t s, the n u in -ber changing from time to time, but ;tl-ways ;tl-ways definite and specific at any time, and remember that in actual circuln tk.n this gold bullion is represented by yellow backs, j Gold Is Standard. At the present a rzold bar weighing SOO grains, nine-tenths fine, i.s equivalent lo one thousand dollars just as truly its if that bar were cvt un ino a hundred separate pieces and each was stamped into a tn -dollar gold pi (. These thousand gold dr.lia.rs exist pnten-t pnten-t ially embedded or welded to tret her In the gold bar and circulate by paper rep-resen rep-resen tatives. But. it will now be asked, what rule or criterion Is to guide tho government in making changes in the dollar's weight? A definite and simple criterion f r r li e required adjustments is at hand the "index "in-dex number" of prices. If, at any time, the index number Is found to be 1 per rent above the id'U psr, this 1 per cent is the sitrnal and authorization au-thorization for an increase of 1 per cent in the weight of the dollar. It is finked how we know that this 1 per cent increase in the dolinr's weight Ui Just sufficient to drive the index number num-ber hark to par next month. The an. wt-r is that we don't know, any more than v.-e know when the storing wneel of an automobile is turned, that ir will prove to j have been turned just enough and not ; 1 oo much. Ma ny t h ings may interfere In a month. But if the correction Is not enough, or if it is too niu'h. the Ind'-x number next month will toil T 1 - r- tale. Absolutely prfc-t. correction is impossible, impossi-ble, but any failure to rorrc't reappears tt the n-"'Xt date for ;idjujf men t . and so cannot esca pe ultimate correction. Suppose, for in-tari-, that next month the index nurnb--- U found to remain uti-rhantrwl uti-rhantrwl at ImI. Then th dollar N ioad-d an add! Monal I pr cent . A nd if, n-xt month, it ?.. let us say. lO'-. h e.. one-half one-half of 1 per cnt above par. that one-half one-half of 1 per cent indie;jt-s a third addition addi-tion to the doll.'i r's weight t his time of one-half of 1 per cnt. And so. as -uk as the index number per. -Wis in staying evpti a lit'b- abovp par. the dollar will continue to b ln;i fled :irli month, until, If necessary, it weigh.-; an ounce or a ton, for that matter. To Regulate Index. But, of course. long before it will become be-come so lif-a.vy its purchasing power v. ill, rooner or later. r restored and the ind ;c r:U mb'T pushed bark to par. Should it fall below par, say 1 per c-nt, the dollar will n- reduced in w.-iu'ht 1 per cent, rind each month that the index number remains below par the now t hfnvy do; la r will be union ded arid t he pri'e leel brought up to pjr, Thus bv ballavt thrown overboard or taken on board nnr index number is kept at wuhstantially the prop r level. Tn ehort. 'he a d j u.nt m e n t . hi'" all human a-i-.iM men'. tal-.-H pi-'"e "bv trial ard ( rror " Tii'-re Is always a f-lit'ht deviation, devia-tion, ' but it Is always b ing mrr-t-l. Our monetary au'omohile, never !., -S c.ai.fv In the straight lino marked out, but Its; deviation fiom that line will al- iviivK afford the criterion needed for st'-'Ting it back. Karli dollar of bank noles and other fl'liKiarv monev v.-oul'l, as now, be re-d'.-iiial.ie In a dollar of y "1 lo wba ' ki. and tlict ' fore such paper nionev would be, ex-neiiv ex-neiiv as now. at paritv Willi yellowbacks. I.,i, b dollar of th"f.. yellowbacks would, in turn I" re.l'-em.il.le i, I the governm"iil offi , 'h In a gold bullion dollar and would, tl,.r,.r, ,r,.. alwavH be of eqiial value therewith; there-with; and. fltiallv, ea.-h dollar of gold bullion bul-lion would, bv periodical a dj I ml i ,T'n t of lis v.eiglit through an Itid'ex numb'-r. be lo pt ',-,- i , . -;i r I v equivalent, lo the value of Ibe bal of Important coin moil 1 1 lis upon uiii' h the lri'o' liilmb'T If bap.'l. V,',. would then be rid of a. flucl uat lug .,,!,.,, bed with its long IraliiM of bad on -' qu' ti' '. The uioii' lary yardetick v.ould'be at laat slandardifd. |