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Show FISHER HAS SCHEME 10 MAKE DOLLAR . MEET NEEDS Increased Cost of Living Leads Economist to Suggestion. By Irving Fisher Prtfiior of Political Economy, Yal. Umvaraity. Sine 1S6 there has been In thla cnunlry a steaily Increase in prlcea in the boclnnina; only 2 or 3 per cent a year, or 1-5 per cent per month, but lately very mm-h mure rapid. I or 4 Pt rent per month. At the time of the revolution and iliirina the Civil wur. prlrea were almi-lariy almi-lariy very much fncreaaed. Tlie atory ia tohl of a hoiiHtkeeper who went to market with her "Ouitinrntal" paper money in n h.-iMket and hrouRht home her purrhqto'a In tier pur.p. Kvrft today to-day 'not worth n Continental" ia the expriion for the limit of worthlesn- I PRICE MOVEMENTS. In Russia, during th war, printing presses turned out rublrs night and - .Ufc. Ifcilll Ihs mmmmi ta Ne pnfffWI ntpblly dejireciMtcd; and the soaring prices doubtless helped, through the discontent they created, to I ring about the revolution. In the I'nlted States pric movements move-ments are measured by a figure called an ".mleg number," which is the care-fully care-fully calculated average of wholesale " price qTintatlnns role t.-d monthly by the bureau of labor statistics. Taking the index number for 1113 as 1U0 per cent, the price level has Increased ao that in August. tl8. the Index number num-ber Is 203 per cent. It is easy to see that the hlRh prices In revolutionary tlms or in Russia were la r ire I y due to depreciated currency. cur-rency. The same cause, although we hardly realize it. largely explains our high prices today. None of the other causes alleged wus sufficiently general gen-eral or important to fully explain the great and universal Increase. The rme began in this country with the Importation Im-portation of large quantities of gold from abroad In payment for war supplies, sup-plies, and has Increased with the tremendous tre-mendous Increase In the uae of credit. CURRENCY INFLATION. Currency Inflation doea not necessarily neces-sarily mean irredeemable paper money. mon-ey. It exists whenever the currency supply exceeds the huslness needs of the country; for an excess of currency, curren-cy, even gold currency, baa the same effect as the exctss of any other commodity. com-modity. I. e., depreciated value. If currency losea value. It will naturally take more dollars to pay for a given amount of goods. When prices rise rapidly, all people who .mi i 'Tel-, Inn nu'.uly MH'nini'B siif- ' fer; fur the number of dollars they receive remain the Sara while the value decreases. Salaried people and teciplenta of Insurance, annuities. Interest In-terest on savings or investment ara affected. Wages also lag behind in the general in renae, thua causing discontent dis-content and even strikes for higher pay. A period of high prices has, in the pust. been followed by a reaction w hen prices fall. Then buafneaa (which depends on profits for Its welfare) wel-fare) suffers, and hard times may follow. fol-low. Thus our fluctuating currency Is largely responsible for our unstable hus'ites life, end for all its attendant eviis of crises, depi-ittons, strikes and unemployment. To stand Ice our currency would lie. then, a funda- I mental and far reaching reform. I Hime the dollar is ut the mercy of I anything which can affect the supply 1 of our currency, such us the Increasing Increas-ing use of credit or an Invention In gold nunlj.g which will flood the world wiih Khl, it is evidently not a stable standard of value. What is It, then? It Is a standard of wefrht. 23.1 -rains of g'-ld. fine. It fluctuates tn J vahte lerause It Is gonstsnt In weight To be constant In value, th dollar most fluctuate in weight, t. ., b w righted suffK lent ly to compensate for its loss In purchas:ng power when prices are rising, and be lightened to decrease its pjrehaning power w hen prices are falling. WHY NOT VARY WEIGHT? This ia perfectly practicable; for It Is not necessity that the actual dollar dol-lar varying in wetKht from time to time should circulate. The circulation of gld is already chiefly Darough its paper rr-prtrniat ive and can he niad enttrciv The tliange in the dollar weight would then affect simp-Iv simp-Iv the amount of gold bullion for which a gold certificate could be redeemed, re-deemed, or the no m tier of paper certificates cer-tificates paid for an ounce of gold at the mint. The amount nf change In the dollar wetrht would h automatically determined. deter-mined. anmt h by month. by the change in the index number. A I per cent excesa in prices above the ideal imr or standard would Indlcste at any given month th need for a 1 per cent increase in th dollar weight to maintain th doliar at its former purchasing power. If the excess continued con-tinued In the neit moot h another 1 pT cent would be added to th dol- lar. and so on. ' TECHNICAL DETAILS. ' j Th amount of gold behind the gold' certificate would be Increased until the stopping of the price Increase showed that the adjustment was sufficient. I and the depreciation of gold taken rare of in the increased dollar weight. The reverse process would take place If the Index numler fell Iwlow par. 1 Thus everv fluctuation would be the I men for an adjustment, and the price b vel would be, practically speaking, kept staole. The bullion "dollar" i would be kept stable in purchasing ' power, and the gold certificate, stand-! ing for a "dollar" In purchasing power i regardless of what amount of gold I IC might represent at any time) would alto b stable. The technical details of the nlvn, j providing against speculation In' gold, j and for keeping up the gold reserve have been satisfactorily worked, out ' fir the protection of the government' from loss. j Just now, with th end of the war. I no on knows which way price will move, t ncertalnt y is t he re fore projected pro-jected Into all our forecasts and plans. ' The immense war loans and the investment in-vestment tn Liberty t nris by so manv people will aagravate the injustice of price movements. Certainly w do sot wish to see Liberty bond holders i virtually losing all thir interest on account of th loss , in - purchasing power of the sum they Invested. Neither do we, on the other hand., wish to s-e such a rapid deflation as to' make a business depression in ad-ditlon ad-ditlon t all the it her postwar pron-lems. pron-lems. The a it nation crlea out for th fundamental reform of a stabilised dollar, 1 . |