Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-03-09
What in Place Of Goldf


That governments would take certain
precautions against such catastrophe 10
frankly admitted. but the further Ques-
ton is raised, what standard could they
find to take the place Of gold-Whether,
il they sought 1t in some other metal,
the secret of transmutation of metals
having once been discovered, there would
be any Of them which would oner ade-
quate security against similar deoase-
ment?
The more extreme and fantastic results
of such a flood Of gold have been oc-
casionally the subject OF romance. On
the serious side Of the problem, II may
be said, however, that measures OF de-
tense would undoubtedly be found to rniti-
gate its suddenness and severity. Coun-
sells Of conservation exist even among the
eight economists and six chemists and
litterateurs who furnish brief answers to
the question, what would happen to CIV
ilized society in case of the discovery
of transmutation at small COST! Mne;
Curie the only woman who Is honored
with a part in the symposium. curtiy
diSrniSSes the question with the 1ollo"lnB
declaration:
while it is true that spontaneous
atomic transformations have been OBJ
served in radioactive bodies (the produc-
ton of helium by these bodies, which
you mention and which Is perfectly cor
rect, we may. on the other hand, be
sure that no transformation Of a simple
body has vet been obtained by the EFFORT
of man through measures conceived by
him. 1t is therefore entirely useless at
present to consider the possible conse-
quences of the manufacture of gold
A higher degree of sanity, if less i'm
agination, may be ascribed perhaps to
the feminine participant in this discus
sion than to the members Of the other
sex, who give more or less free rein to
their imaginations in dealing with the
effects of golden flood. Ely the eight
economists the question is, of course, dis
sound monetary principles. 1t is interest
ing to note, however, that all the progress
of the past century in monetary science
has not yet stilled differences Of opinion,
or at least differences of definition. on
the character and effects of money. We
find it treated by some as mere symbol,
for which it might be possible to aubsti-
tute new standard based upon the
value of other articles or upon the pur-
chasing power of days labor, while
actually used as currency. IN comparison
with the operations of the banks and the
clearing houses, is cited as evidence that
the destruction Of the basic metal would
not have immediate and striking effects.
OF the former type Of criticism Is the
suggestion of Prof. George Renard of the
College de France, Ito give legal tender
quality to a universal paper money, which
earth to the other
The defect Of solutions of the monetary
problem based upon the substitution for
gold of conventional valueS-like the
bushel of wheat or the days labor-is that
they fail to take account that the value
of money and of all transactions ex-
pressed in money must be based upon
either recognized value in the standard
metal or upon limitation Of quantity. It
is sometimes said by economists who
have given more attention to theory than
to economic history that the function of
gold as the standard Of value Is a purely
conventional function-that If gold were
demonetized throughout the world, this
value would be lost. While it is undoubt-
eddy true that characterization would have
depressing effect upon the value of the
metal. 1t would not by any means de-
stroy its attractiveness as store of
value. One of the best evidences of this
is the eagerness with which gold is
sought in undeveloped countries, which
have neither gold standard nor a
gold circulation. The fact that the
adoption Of gold as standard is not
the result of convention, but OF evolu-
ton. IL evidenced also by its universally
as a standard as well as by its inherent
qualities Its special suitability for money
gold derives from its universal exchange
ability: every one Is ready to take gold
for other articles, where he hesitates
and dickers over taking other articles
for gold. And this exchangeability is in
herent rather than arbitrary.
The high qualification of gold for use
as money is based upon the reasons set
forth in the text books-uniformity of
quality. indcstructibility and divisiblity
without loss. What adds to the suita-
bility of gold as a standard OF value
is the permanence of the existing stock
If gold We're like wheat. nearly the en-
tire crop being consumed or falling into
decay within year. 1t would be an ex-
ceedingly unstable standard of value, be-
cause the quantity produced In one year
might fall enormously below the guam
tity produced In previous year. But
with gold. the annual production. wheth-
er great or small. is superfmposed upon
the stock already in existence, the prod
uct Of more than four centuries OF out
put from the mines of the world. Hence,
even the great additions of recent years
rising to more than S4J0OO0. 600 per year.
Or nearly four times the annual produc-
ton of twenty five years ago, can do no
more than alter slightly the increment
OF increase in the stock OF standard
money from year TO year.
If. therefore II substitute for gold Is
to be found in any existing physical
substance, or any which can be fabri-
Gated, the new material must have SINH
lar qualities in order to possess similar
qualfncations-indestr divisibi
ity and permanence Of the prs-existins
stock.