The Washington herald., 1912-10-13

-atiea occurred Tie iuersase q. ~ ssig'
nloeaee would operate to cogroct u 1he
present mint price b nxsd: Il - ~ In
1e16d- pef oance Of goid ma Aoe IN Eng
laD4 Of mo per ounce of Good 80 nns
IN ~ United 0tatea The prcposai -
ssmpay that instead of always paying the
sams money price for eoid. no matter
now much II appreciates or dsDreeiates
in purchasing power over goods. We
would pay exactly what Il b worth
Thsrs b NO virtue In . dxsd mint price
for gold, but there 10 virtue In . fxed
purchasing power Of money.
Plan Aeeeives ADpsovsl.
The proposed plan has besn indorssd
By those who have examined n IN detail
II escapes the objections to most pro-
posais for improving the standard OF
value. 1t would work ~ automatically
~ the mint now works. or ~ the regu-
lation Of the coinage Of the Philippines
or OF British India under the present
gold exchange standard, to which sys-
tenn. ~ have shown In the Purchasing
Power Of Money the present proposal
II analogous. The operation Of the sys-
TEN would not depend upon the discre-
ton Of any ofncial. I most strongly OBJ
ject to any system Of regulating the
value Of money through the exercise OF
judgment by . government oficial.
Such systems are absolutely impracti-
cable and dangerous. Their occasional
promulgstion has made most people sus-
picious OF any proposal to alter the exist
Ing standard Of value. Even the gold ex-
change standard for silver countries was
looked at askance until actual experience
proved its workability. The system here
proposed is at bottom precisely the same
thing. In the gold exchange standard
tho ultimate basis is gold outside Of the
circulation. This system has been applied
only to silver countries. The present pro-
sal Is simply to apply II to gold countries
and to readjust the par between the money
In circulation and the gold outside 20 as
to maintain constancy Of purchasing
power.
Plan Has Been Tried.
The plan involves no untried elements.
It's novelty consists solely in combining
into = coherent system a number Of ele-
ments all Of which have been tested by
experience. II Is not fiat money scheme
II IL not an abandonment of the gold
standard. 1t il merely making the gold
standard stable. This ultimate basis is
still gold bullion interconvertible with
gold coin. But this gold bullion. the uIti-
mate source OF the monetary unit. Is to
be Of fixed instead of variable value.
All nations can adopt the system with
out disturbing any existing coinage pa
per money or banking arrangements.
There would be no outward change in the
appearance Of the currency. Even silver
countries can get its benefits IL they
adopt with India, che Philippines, Pam
anna, Mexico. and the Straits ,SettIements)
the gold exchange standard The ma
jority Of people would never know what
had happened any more than the ma
jority Of people in India yet understand
what happened in 1898. But all classes
would enjoy the safeguards Of a stable
standard OF value. Long term contracts
would be safe. Crises would be almost
impossible. The funds mental reason for
much unsound speculation would be
taken away The rising cost of living.
30 far as this means a fall in the pur-
chasing power Of money. would come to
an end.
Would Partially Solve Problem.
1T is not pretended that TO stabilize
the purchasing power Of the dollar would
fully solve the whole problem Of the cost
OF living. This larger problem concerns
the purchasing power not simply Of the
individual dollar, but OF the whole in
come. The purchasing power of a mans
income depends not only on the purchas-
ing power of each dollar. but also on the
number OF dollars of income he can Sc
cure But IL is impossible in this short
paper TO cover the whole problem of the
cost Of living The branch of IL which
has been discussed-the problem of a
stable yardstick of purchasing power
will serve as sample of the truly grear
problems to be considered by the pro
posed international conference.
These problems are not only great. bu,
pre- ssing. Industrial unrest is almost uni
versal- This unrest is the direct. al
though usually unrecognized. result of
the mighty upheavals going on in prices
with the imperfect adjustment in wages
salaries, interest. rent. and contracts o;
all kinds. This unrest has already ex-
pressed itself in bread and meat riots
and other forms of violence on both con-
tinents- Furthermore. this industrial un-
rest. with the attendant excitement. is in
turn the chief cause Of our political I'M
rest This manifests itself in new par
ties and new proposals. and in a grea,
mass Of legislation to control or lower
prices.
Such legislation includes tariff re-
form, railway rate legislation, the project
Of parcel post. antitrust legislation.
and public utilities legislation. designed
to give the consumer lower rates for
water. gas. electricity, telephone. and
trolleys. Many OF these projects are
sound and desirable in themselves. but
few Of them are far-reaching enough to
arrest appreciably the rising tide Of the
cost Of living. Disappointed Mt in the re-
suits expected from false ranaceas is
inevitable. This disappointment will
greatly infame the growing discomfort
and make worse the unmistakable trend
toward socialism, syndicalism, and vio-
lence.
Needs Scientific Remedy.
Unless the problem OF the cost Of liv-
ing is dealt with in a thorough and