Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1912-09-27
PURCHASING POWER
OF MONEY REGULATED
Fisher Proposes Plan to Remedy High
Cost of Living, by Stabilizinz Pur-
chasing Power of Money.
Associated Press.


Boston, Mass, Sept. ga plan to
stabilize the purchasing power of
money as a remedy for the increas-
ing cost of living was laid before
the international Congress Of Cham
bers Of Commerce today by Prof.
Irving Fisher of Yale University.
His suggestion was made in antici-
patton of the international confer
ence on the high cost of living rec
ommmend by President Taft.
My plan," said Prof. Fisher, sis
similar to a suggestion of Governor
Woodrow Wilson that the weight OF
the gold dollar should be increased
enough to restore some of it's lost
purchasing power.
II have said that my proposal is
virtually to increase the weight Of
the gold dollar. But this increasing
weight would not be added to the
coin themselves, but only to the bull
lion out Of which they are made. In
other words, the proposal is to re-
store the ancient custom of 'seignior-
age on gold coinage. At present
there is no seigniorage. Coinage is
free and the weight of a gold dollar
is as great as the weight of the bull
lion which the miner takes to the
mint and for which he receives back
a dollar. He now takes 25.S grains
of gold bullion 20 the mint to secure
a 25.S grain gold dollar. The coined
dollar weighs the same as the I'M
coined or bullion dollar if | may
use such a term. My proposal is to
increase the weight of the bullion
dollar: that is, to require 26 or ~
or 2S grains of gold bullion to be
taken to the mint to secure a 23.S
grain gold dollar. The coined dol
lar would remain unchanged in
weight (25.S grains), but the bull
lion required to secure the coined
dolar-the bullion dollar would be
heavier. The difference in weight
between the two would be the seig-
niorage. 1t would not be fixed once
for all but would be continually ad-
justed SO as to give the dollar al
ways a fixed purchasing power. AS
the coined dollar would be intercon-
vertible with the bullion dollar, he
two would always be equal in value.
The ultimate dollar would be a\it is
nova dollar of gold bbullion&but
this dollar would no longer be of
fixed weight and variable value, but
of fixed value and variable weight.
The adjustment of the seigniorage
would be entirely automatic. depend
ent on an official index number of
the price level. The system here
proposed is, so far as I know, the
only one proposed which is purely
self acting. If the official index num-
III DbI S1OWS q llSC vi RAA1Ao - 1Ny
year, say one per cent, it would be
mandatory for the minis to add one
per cen to the s~eigniorage. Elk
pressed the other way about, if gold
loses one per cen or its value, the
minis would pay n per cent less
for this. This would tend always to
preserve a uniform purchasing pow
er of the monetary unit. IS soon as
any depression occurred the increase
of the seigniorage would operate to
correct it. The present mint price
is fixed; 1t is G3, It's, 10Rd per
ounce Of gold 11-12 fine in England
or $3.50 per ounce of $40 fine in
the United States. The proposal Is
simply that instead of always paying
the same money price for gold, no
mater how much 1t appreciates or
depreciates in purchasing power owe
goods. we shall pay exactly what ii