The sun., 1903-12-17
Radium and the standard Of Value.

To TIE EDITOR OF THE SUN-.Sfr. Who knows
but that tho discovery OF radum may herald the
realization OF the dreams OF the old alchcmists-
the transmutation OF the base into the so called
precious" metals' 1t Is quite possible that of
the greatest social and economic problems of our
time may be solved In the chemical laboratory.
Imagine that twenty -hve years hence SIR William
Ramsay. or his successor. announces that BY a
simple and inexpensive process lead, tin. zinc and
similar metals may be transmitted Into gold and
silver. What will then become OF our present
financial system' What will become of the called
gold standard. and what sense will then be con
veyed by the term "blmctallist"7 VIII not chem,
istry have then exposed one Of the greatest deln.
sions that has ever afflicted the human mnd-the
idea that the material can function as standard
of value?
With the inevitable collapse OF metallic money
based upon the so called intrinsic" values of the
metals which would necessarily ensue upon the
tranSmuta alton discovery. II may be interesting to
ascertain what monetary system would be likely to
take the place OF The present one 1t seems to me
questionable that nations would be compelled to
have recourse to a purely paper currency (Which,
after all is the currency OF the highest civilization,
and this currency would doubtless be based not
upon one particular commodity, but upon all the
various forms OF wealth.
Instead of taking certain commodity az q unit
OF purchasing power. we should adopt unit which
must necessarily be Ideal. namely. the purchasing
power OF such commodity at given time.
For example. suppose we imagine that all the
gold and silver OF the world should suddenly vanish:
the exchange relation OF commodities would stl be
expressed in terms OF pounds shillings and pence.
dollars and cents &c: but in place OF pound or
dollar representing certain weight OF gold II would
stand merely for certain amount OF purchasing
power corresponding 10 the purchasing power OF the
dollar or the pound sterling al the time that It dlsap
peared: and rs It would then be impossible TO coin
any more sovcreigns or dollars, governments or
the banks would merely Issue paper notes repre-
Scntng these units
An illustration Will make this clearer. Inag Inc
a number of balloons, \, b. c and u. at different
attitudes; and suppose we wish to trace the varl
atlons in their relative positions from time to
time. All that we know OF their positions is that
the distance between 4 and II Is twice that between
a and the earth. and that to & is equal to three
times a to h. while c to ID Is twice to C. How are
we TO determine their positiOns' The problem Is
a very simple one. and Is analogous to tracing
changes In values. suppose A TO the earth Is un p
known. represented by 4. Then \ to Is = 2x.
A to Cox: therefore. B to C=-4x and G to DIX.
by following the variations in the attitudes OF each
balloon. in terms OF Away dctc crminc their
relative positions. II is not necessary TO know
what Is: so long as We can express distance in
terms OF K, these rcat Ions can always be deter.
mined So. may be said TO correspond to our ideal
unit OF purchasing power, and IL Is not necessary
to know tho dimensions OF this unit In absolute
terms. All We desire Is to be able TO trace the
fluctuations In the purchasing powers Of commod-
i,ios In terms ~ y. either as multpcS or fractions
Nearly all the worlds financial disasters may he
traced to this conflict between the material and the
ideal. what the financial world is to day employ
ing Is no; tho substance gold. but merely Its put-
chasing power; and BY failing to connect this pur.
halng power with a certain hxcd time. industry.
trade and commerce suffer by the fluctuations
which necessarily occur In the purchasing power
OF all commodities. ARTHUR kfTsoE.
WHITEHALL CLUB, WESTMINSTER. s. w, Dec. ..