The Washington herald., 1913-06-22
1t Is Especially Notable in
that 1t Prescribes Just Rule
for Determining Volume Of
Currency to Be Issued.
By GEORGE n. SHIRLEY.

tDirecior Of American Bureau Of Political Research
The banking and currency bill, which
the chairman of the House Banking and
Currency Committee, Representative
Carter Glass. has made public. is espe-
cialiy notable in that II prescribes an
admittedly Just rule for determining the
volume OF currency TO be issued by the
national board in charge. namely, just
enough currency to maintain "a stable
price level"
Under such a rule there cannot be any
undue imitation of currency or Of bank
credits, nor any undue contraction of
the same
That will go an exceedingly long way
in getting the bill accepted by the people.
They are not posted as TO the intricacies
Of banking and the currency. but they do
know that principles of justice should be
enunciated. and here is one that is all
important.
The meaning OF "a stable price level"
as stated in the bill, is that the average
of the prices of commodities at whole
sale, represented by an index number,
shall be kept stable day after day, and
month after month. and year after year.
to the extent that the United States shall
be able to bring II about.
AT present the Federal government Is
measuring the average of prices of COM
modities at Wholesale. and has been dong
so for twelve years; also. the present
Liberal government in England has COM
menced to measure the price level. and
the Canadian government has been
measuring its price level for a number
Of years.
The full meaning of this is that these
governments are measuring the pur-
chasing power OF money and proclaim
ing it. That is a most important op-
Grafton, as 1t tells the people Just how
the measure of value is being controll-
ed by the government.
Twenty-Five years ago, at a time
when the price level of the gold stand
ard world was falling and great ruin
was being wrought thereby. a commit
tee appointed by the British Associa-
ton for the Advancement of Science
reported unanimously that the pur-
chasing power of money was being
measured by individuals In a scientific
way. and the committee recommended
that the British government should
provide by law "a for the Official re-
cording of prices, CD for the con-
struction of an official index number
of average prices, and CD that indi-
viduals and corporations be authorized
to place in their contracts a provi-
sion that the payment of money might
be in the same amount OF purchasing
power as the money represented at the
time OF the making of the contract.
For example, II at the time when the
payment of money should become due
the purchasing power should be in
creased 10 per cent. let US say, that
the payment would be in a less num-
Der of dollars. namely, 10 per cent less,
and that should the purchasing power
of money be deprecated, then a great
er number of dollars would have to he
paid.
This tabular. or multiple standard. as
II Is termed. In connection with the
gold standard, has not been adopted
by law in any country, but the first
and second of the recommends tons of
the committee of the British Associa-
tion for the Advancement Of Science
have been adopted somewhat widely,
as above pointed out. In the United
States the official measurement is by
the statistical bureau of the United
States Department OF Labor. and in
April of this year was issued a PAM
phlet for free distribution, entitled