Economics Volume II: Modern Economic ProblemsFetter, Frank A. (Frank Albert)
General
Economics Volume II: Modern Economic Problems
Fetter, Frank A. (Frank Albert)
Economics
After determining the tabular standard, the actual regulation of the
quantity of money to make prices conform to the standard might be
accomplished in one of several ways. It might be done by letting the
value of the gold dollar fluctuate as it does now, while requiring
a greater or less number of dollars to be given in fulfilment of all
outstanding contracts. For example, if prices by the tabular standard
fell from 100 to 95 in the time between the origin of a debt of $100
and its payment, the debt would be discharged by paying $95; if prices
rose to $110, the debt would be discharged only by the payment of
$110.
By the plan of a "compensated gold dollar" the legal weight of the
gold coins would be increased or decreased from time to time to
conform with the tabular standard. Still a third method would be to
regulate the issue of standard paper money, contracting and expanding
its amount by issue and redemption, by deposit in and withdrawal from
depository banks, at regular intervals to bring prices into conformity
with the tabular standard. These are as yet but distant possibilities,
and for some time to come gold will continue to serve as the standard
money in the same manner as in the past.
[Footnote 1: The amount of silver is here expressed at its coining
value; this is not the commercial value, but rather the number of
silver dollars 371.25 fine grains weight that could be made out of
the silver produced. Silver and gold of equal coining value are,
therefore, as to weight always in the ratio of 16 to 1.]
[Footnote 2: See above, ch. 5, sec. 4.]
[Footnote 3: See Vol. I, p. 45 ff. See also above, ch. 4, sec. 8.]
[Footnote 4: Numerous tabular index numbers have been worked out for
different countries and periods. The main results of the more recent
ones have been brought together with critical comments, by Professor
Wesley C. Mitchell, in Bulletin 173 of the U.S. Bureau of Labor
Statistics, July, 1915, from which the figures here used are quoted.]
[Footnote 5: The price movements in the United States between 1860 and
1879 must be left out of consideration here, for the excessive issues
of greenbacks drove gold out of circulation and made greenbacks the
standard money, except in California and elsewhere on the Pacific
Coast where, by public opinion, gold was retained as the circulating
medium.]
[Footnote 6: This change was what later was referred to in political
discussions as "the crime of '73." The dollar referred to was the
_standard_ silver dollar; at the same time the coinage of a _trade_
dollar was authorized (intended to be used only in foreign trade),
which, after 1876, was not legal tender in the United States.]
[Footnote 7: See Vol. I, p. 262.]
[Footnote 8: See Vol. I, p. 263, on credit transactions, and p. 302,
on the interest contract.]
[Footnote 9: See Vol. I, p. 304.]
[Footnote 10: See Vol. I, p. 319.]
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