The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-10
CHANGE THE WEIGHT OF A
GOLD DOLLAR?
Chaos Might Result on the Return Of
Normal Conditions.

To THE EDITOR OF, THE SUN-sir: The
article by Mr.. Vein in your issue OF
August 80 Is very interesting and his
exposition most convincing of what
would be the result Of changing the
amount of gold to be coined as a dollar.
IN his remarks on the current cost OF
producing gold, however, I am inclined
to think he exaggerates the degree Of
change in cost as being on a par with
the change in cost of mining other met
ais, for the simple reason that the fac
wages. machinery. chemicals. transpor-
tation, &C.. do not constitute so large
a percentage Of cost in mining gold as
other metals, that Of transportation, for
instance. being practically not a fac
tor at all.
II the production Of gold has been
materially reduced since the European
war broke out, as Mr.. Vein intimates-
have not seen the statistics lately, but
have no doubt he is correct--it has UNI
6oubtedly been at least partly in re-
Spouse to n tendency that was sure to
develop sooner or later as a result of
the materially reduced cost owing to
new processes that had been going on
for fifteen or twenty years previous.
Up to a certain point this would natu-
rally stimulate gold production, because
the prices of other things, as expressed
In gold values, would only rise gradu-
ally, although with increasing rapidity,
and thus the same amount of exertion
-, hrt, la
ecsults than in producing commodities.
The amount OF gold thus thrown on the
market was a mere drop in the bucket,
cumulative theorists to the contrary
Notwithstanding. as compared with the
total amount Of transactions or of COM
modities in existence, for even the en-
tire volume Of gold In existence is less
than n days sales on the New York
Stock Exchange frequently amount to.
But just as soon as the disparity in
prices as compared with the cost has
disappeared, the incentive to increased
production was bound TO disappear also.
To some extent it would have done so
inevitably even though the war had
never come. but when 1t did come, with
its unheard OF unbalancing OF all in
dustry, tho effect was bound to be n
tensifed. The encouragement to pro-
duce gold has not arisen from the gold
producer being unable to get the same
increased return for his effort that other
PRODUCERS have got, but from the fact
that other things were wanted more
than gold, and that. irrespective OF
values all energies were directed to
producing the things that were wanted
most. TO that extent the value Of gold
further deprecated, in other words,
money prices further advanced, and 1t
was that which produced the phenom-
enon Of which Mr.. vezin speaks when
he states that the producer Of 1923 grains
OF gold would get from the mint 50
price worth relatively less-it Is not
quite correct to say worth no more
than II was worth before.
1t is not quite true either that the pro-
Queer OF gold bullion sells it for gold
coin. What he gets from the mint is
gold coin, or more often a certificate OF
deposit, but what he sells it for is
goods: just as goods are always sold
for goods, not for gold and while 1t is
true that paper money and even checks
or promissory notes are always subject
to demand for gold. the right is in effect
never exercised the title to goods or
services which they express being nearly
always exchanged for title to other
goods or services. 1t is on this point
that the advocates OF the quantitative
theory OF money are most astray, be-
cause the demand is not for concrete
money OF whatever kind, but rather fol
goods.
There is no denial OF Mr.. VEINS ar
gument in this, but only a supplement-
ing OF it, II what I have said Is true,
II is all the more important that the
be disturbed. While the present condl-
ton OF production exists, no standard
could possibly be found that would be
stable, and the returns from industrial
effort are bound to be abnormal, some
things being eagerly desired for abso-
lutely more than they are really worth
and other things for much less Just as
ship workers wages are out OF al
proportion TO office salaries. But quite
apart from the important factor Of the
disturbance Of credits to which Mr.. We
zin forcibly alludes. whenever we do re-
turn TO normal conditions, change In
the standard Of values, even in current
transactions, would result In absolute
chaos. L. ]. SHRIvER.
NEW YORK, September 9.