# Stabilizing the Dollar/Appendix 6

APPENDIX VI
BIBLIOGRAPHY
1. Some of the Chief Index Numbers Current
United States
Canada
Great Britain
France
For more complete lists and descriptions of current, as well as of discontinued, index numbers see:
************ For application of index numbers to war prices in different countries see:
2. Some of the Chief Writings on the Principles of Index Numbers
3. Remote Anticipations of the Plan to Stabilize the Dollar
A. Bimetallism. There would be little use, even if it were possible, to include all writings which touch on the need for combating the instability of monetary standards. I shall, therefore, merely run over, very briefly, the proposals which anticipate only remotely the proposal of this book. These fall under four heads:
Bimetallism and other schemes for combining the precious metals.
The Gold Exchange Standard.
​Irredeemable Paper Money, the quantity to be regulated by reference to the tabular standard.
The Tabular Standard.
In this subsection A will be considered the first of these.
The literature on bimetallism is, of course, enormous. Bibliographies were published in the '90s by Soetbeer and others. The nature of the proposal, including the claim that it would stabilize the price level, is well set forth in Francis A, Walker's International Bimetallism, N. Y., Holt, 1896, and Major Leonard Darwin's Bimetallism, London, Murray, 1897.
That bimetallism would work under certain circumstances but would break down under certain other circumstances has been shown by Irving Fisher, in "Mechanics of Bimetallism," Economic Journal, Sept. 1899, pp. 527–537.
Professor F. Y. Edgeworth has shown that bimetallism would, on the theory of probability, have only a slight influence toward stabilization and that "symmetallism" would be somewhat more stable than bimetallism. ("Thoughts on Monetary Reform," Economic Journal, Sept. 1895, pp. 434–451.)
What Professor Edgeworth named "symmetallism" is a method first proposed, apparently, by Professor Alfred Marshall for joining two metals virtually in a joint coin, obviating the danger of a breakdown to which bimetallism is always subject.
Other proposals of this sort for joining two metals have been made, e.g. by Dr. Theodor Hertzka in Das Internationale Wahrungsproblem und dessen Lösung, 1892, and Mr. A. P. Stokes in Joint Metallism, 1894. Léon Walras, in Théorie de la Monnaie, Lausanne, 1886, advocates, rather than bimetallism, a system of gold money with a variable amount of silver bullion to be issued or recalled as a "regulator."
B. Gold Exchange Standard. The idea of the gold exchange standard was, apparently, first proposed in ​1876 by A. M. Lindsay, treasurer of the Bank of Bengal. The idea was suggested to him by reading Ricardo's Proposals for an Economical and Secure Currency. Lindsay published a pamphlet on the subject in 1892 entitled Ricardo's Exchange Remedy, a Proposal to Regulate the Indian Currency by Making it Expand and Contract Automatically at Fixed Sterling Rates with the Aid of the Silver Clause of the Bank Act. London (Effingham, Wilson & Co.), 36 pp.
The first step toward applying Lindsay's idea was taken in 1893, when, as a consequence of the work of Sir David Barbour and the other members of the Herschell Committee on Indian Currency, the Indian Mints were closed to silver and, consequently, the rupee was given a scarcity value above that of its contained silver.
The second step was taken in 1898 when a gold reserve was begun. The full-fledged gold exchange standard was first put in force in 1900, when rupees in India were virtually made redeemable in gold in London through bills of exchange on London.
A different plan for preventing money in silver standard countries from sinking in value relatively to gold was to impose a seigniorage on silver coinage increasing as the price of silver decreased. This proposal was made by Henry Coke before the Herschell Committee in 1893 (§139). In principle, it is nearer the proposal of this book than is the gold exchange standard.
Fuller information concerning the gold exchange system and other plans of currency reform will be found in E. W. Kemmerer's Modern Currency Reforms, Macmillan, 1916.
C. Irredeemable Paper Money. This dangerous expedient has always had its advocates, and these have ​usually been inflationists. But a considerable number have proposed a paper money regulated by an index number of prices. Such a plan is in purpose similar to, but in method very different from, the proposal of this book. The essential difference is that between redeemability and irredeemability.
Among the many who have suggested this form of monetary system are:
Carl Menger, the Austrian economist, who suggested that the price level could be stabilized by the issue of paper money, as required, to neutralize fluctuations of purchasing power; Charles Gide, who in Principles of Political Economy (1883) speaks favorably of Menger's proposal, but favors it only in the form of international paper money; E. Benjamin Andrews, An Honest Dollar (1889), pp. 36–42; Henry Winn, "The Invariable Dollar," The Traveler, Oct. 17, 1891; Arthur Kitson, "A Scientific Solution of the Money Question," The Arena, 1895; Eltweed Pomeroy, "The Multiple Standard for Money," The Arena, Sept. 1897; Frank Parsons, "Rational Money" (1898), who would effect the expansion or contraction of currency through the use of call bonds, or a sliding scale of interest on government loans, etc., in accordance with the movement of prices [this book contains a discussion of most of the above references and mentions others]; Alfred Russel Wallace, "Paper Money as a Standard of Value" (originally in The Academy, Dec. 31, 1898, and reprinted in Studies, Scientific and Social, Vol. II, London, 1900).
D. The Tabular Standard. This has been described in Appendix III, §6. One of the earliest writers on this method of correcting aberrations in the monetary standard was Joseph Lowe, who, in his Present State of England in Regard to Agriculture, Trade and Finance, Chap. LX (London, 1822), proposed "to correct the legal standard of value (or at least, to afford to individuals the means of ascertaining its errors), by the periodical publication of an authentic price current, containing a list of a large number of articles in general ​use, arranged in quantities corresponding to their relative consumption, so as to give the rise or fall, from time to time, of the mean of prices; which will indicate, with all the exactness desirable for commercial purposes, the variations in the value of money; and enable individuals, if they shall think fit, to regulate their pecuniary engagements by reference to this tabular standard."
Another writer who made the same suggestion was G. Poulett Scrope, M. P., An Examination of the Bank Charter Question, with an Inquiry into the Nature of a Just Standard of Value (London, 1833), p. 26, and Principles of Political Economy (London, 1833), p. 406.
Another was Mr. G. R. Porter, The Progress of the Nation (Sections III and IV, p. 235). He added a table showing the average fluctuations of fifty commodities monthly during the years 1833 and 1837.
W. Stanley Jevons was an enthusiastic advocate of this plan. In his Money and the Mechanism of Exchange (London, 1893), Chap. XXV, he discusses Lowe's, Scrope's, and Porter's proposals, and comments: "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 of calculations, would compute from these data the average variations in the purchasing power of gold. The decisions of this commission would be published monthly, and payments would be adjusted in accordance with them."
"At first the use of this national tabular standard might be permissive, so that it could be enforced only where the parties to the contract had inserted a clause to that effect in their contract. After the ​practicability and utility of the plan had become sufficiently demonstrated, it might be made compulsory, in the sense that every money debt of, say, more than three months' standing, would be varied according to the tabular standard, in the absence of an express provision to the contrary."
As shown in Appendix V, § 2, plans very similar to the above are now actually employed to some extent.
4. Direct Anticipations
We next cite the writings which describe plans substantially like that proposed in this book (i.e. plans for adjusting the weight of gold in a monetary unit by the aid of an index number of prices) and which were published earlier than the author's Purchasing Power of Money. For others who anticipated the idea but did not publish, see Preface.
"The regulation of the new system is, that in whatever proportion the general and annual price of farm labour throughout the kingdom has a tendency to rise or fall, that rise or fall shall be counteracted by a reverse rise or fall in the current price of the gold and silver coin," p. 221.
Alfred Marshall. Remedies for Fluctuations of General Prices. The Contemporary Review, March, 1887, p. 371, footnote. [Marshall gives two possible plans (neither of which is advocated). One is for an inconvertible currency to be issued (by purchase of consols) whenever a sovereign is worth in commodities more than par and retired (by sale of consols) whenever it is worth less. The other is for a convertible currency, ​each £ note being redeemable at any time in as much as is then worth (in commodities) half the unit together with as much silver as is worth the other half. The second plan is, in principle, virtually that of this book.]
5. Recent Writings on Stabilizing the Dollar
(Omitting most newspaper and minor publications, numbering about a thousand)
Lucien March. Un Projet de Stabilization des Prix. ​Communication à la Société de Statistique de Paris, le 15 janvier, 1913, reprinted from its journal, pp. 10-24. Discussion by Edmond Théry, G. Roulleau, Aug. Deschamps, Adolphe Landry, Lucien March, Irving Fisher.
* ↑ Evidence before the Gold and Silver Commission (1888) Q. 9, 837; and "Principles of Economics," Book V, ch. 6.
* ↑ Ricardo's plan, however, did not go further than merely to propose abolishing gold coin and substituting gold bullion as a reserve, using paper for actual circulation, the Government to sell and buy gold, for paper, at the pleasure of the public, with a slight margin (1⅛%) between the two prices. It will be seen that Ricardo's proposal was like that of this book except that the prices set were not to vary.