The Washington herald., 1912-10-13

COST OF LIVING
Prof. Fisher, Of Yale, Would Sand
ardise the Value Of Gold
Dollar.
GOES BACK TO SEIGNI0RAGE
In an address before the international
Congress Of Chambers Of Commerce. In
Boston. Prof. Irving Fisher. Of Yale
University. proposed remedy for tho
unstable purchasing power of money.
to increase the weight Of the gold dollar
by increasing the weight OF the bullion
on which Is II based. In other words
his plan 10 to restore "seigniorage" on
gold. But he goes farther In that this
seigniorage Ii not to be hxed once for
all. but to be continually adjusted 50
that the dollar shall always retain the
same purchasing power. An onicial In
structed by the Bureau of Labor will
show from time to time what the seign-
forage Ii to be. II the index number
shows that the price level has risen one
per cent the bullion dollar will auto
matically increase that amount. In part.
Professor Fisher. said:
THE great fall of prices ending in 1885
Of gold. Just as the rise of prices since
1896 il often referred to A. a depreciation
Of gold. In other words, the dollar. the
pound sterling. the franc. the mark and
all other monetary units in gold were In
creasing in purchasing power before 1885
and since 1885 have been decreasing. In
both cases the purchasing power varied.
The continual variation In the real
value Of the dollar is the bane Of busi-
ness. 1t is one OF the sources Of booms.
crises. contractions and depressfons by
which modern business men are per-
petualIy vexed. Unfortunately. as yet.
the rank and file Of business men do not
realize the close connection between the
cycles OF trade and the instability Of the
dollar.
Stable Unit Of Value.
Il firmly believe. however. that the
time must come when business men
| throughout the world will feel tho need
OF a more stable unit of value. Business
men appreciate the necessity OF a scien-
tifc determination Of the yard. the
pound. the hour. the horsepower. the Kill
owatt, &c. The governments have bu-
reaus of standards to make sure that
these units are determined to the highest
possible degree Of precision. Yet our
yardstick OF purchasing power. the dol
lar. the most essential and universal unit
employed by the business men, Is per-
mitted to change incessantIy. The whole
world complained when the dollar ap-
preciated and complained again when II
deprecated. No one will deny that the
Oretically 1t ought neither to appreciate
nor depreciate, but to remain unchanged
We have. at present. dollar OF fixed
weight. but not of fixed purchasing pow
er. and We shall never secure a fixed
monetary yardstick until business men
universally appreciate its importance.
Personally. I hope that an International
conference on the cost OF living. while
IL could not be expected to secure this
result Immediately. may lay the basis
for II in the years to come.
Many Remedies SuEKested.
Among the possible makeshifts or pal
liattves which deserve careful cons!dera-
ton are: tariff revision. legislation reg
ulat!ng monopolies. cooperative devices.
reduction of middlemen, the repeal Of the
tax on oleomargerine and other taxes
which directly affect the cost OF living.
municipal markets. the utilization OF
empty city lots. the encouragement Of
business efficiency. the reduction Of hu-
man disease and disability, the introduc-
ton OF workman's compensation and In
surance. the organization Of housekeep-
ers' market clubs. the announcement Of
4. liz, lx-ty lott
cold storage plants. the revision Of gov
ernment regulations as to weights and
measures. especially as concerns the use
OF packages in retail trade. and the es-
tablishment OF an elastic currency.
Among the more ambitious plans
which aim to go to the root Of the mat
ter is one of my own This Is similar to
suggestion of Gov. Woodrow Wilson
that the weight of the gold dollar should
be increased enough to restore some OF
its lost purchasing power. My proposal
is not literally but virtually to increase
the weight of the gold dollar by increas-
ing the weight of the bullion on which
Il is based. I had intended to pass over
this plan with a mere mention, but II
has been suggested by the Boston COM
mittee on programme that I should ex-
plain its main outlines. This l am nat
urally very glad to do. as far as time
permits fOr luTtner ana more tecHnicdi
details refer you to the closing chap
ter of my Purchasing Power Of Money
wouId Increase the WeiRht.
II have said that my proposal is vir-
tualy to increase the weight OF the gold
dollar. But this increase in weight would
not be added to the coins themselves.
but only to the bullion out OF which they
are made. In other words. the proposal
Is to restore the ancient custom OF a
'seigniorage' on gold coinage. At pres
ent there Is no seigniorage. Coinage Is
free and the weight Of gold dollar Is
as great as the weight Of the bullion
which the miner takes to the mint and
for which he receives back a dollar. He
now takes 2aS grains Of gold bullion TO
the mint to secure a 25.S grain gold dol
lar The coined dollar weighs the same
as the uncoined or bullion dollar II 1
may use such a term. My proposal Is to
increase the weight Of the bullion dollar;
that il. to require Is or q or % grains
of gold bullion to be tafien to the mint to
secure a 25.s grain gold dollar. The
coined dollar would remain unchanged In
weight (25.S grains), but the bullion re-
quired to secure the coined dollar-the
bullion dollar-would be heavier. The
difference in weight between the two
would be the seigniorage. 1t would not
be fixed once for all, but would be con-
tinually adjusted so as to give the dol
lar always a fixed purchasing power. As