Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-11
BACKGROUND OF EVENTS
BY PAUL Y. COLLINS.

crate, If the worker chooses to hold
his wages for a time and then buy. ne
must find that they can still buy what
he reckoned to get when he earned
them"
That may be sound fiction, but it is
arrant nonsense as finance, for money
even ideal money'-cannot guarantee
prices of merchandise. Merchandise
values go up or down according to sup
ply and demand, and manipulation, and
| forecasts of weather and rumors OF wars
or famineS or strikes. How can work
man or anybody else freeze" market
prices by just boarding wages until he
sees At to invest?
| There are financiers who contend
that gold is no more stable than other
commodities. Prof. Irving Fisher OF
Yale-one of the most prominent econo-
mistS of America-argueS against the
stability of the value of gold, and he
proposes to take list of standard prod
| uctS as the Index" of values and then
have the Government change the
amount of gold in dollar, each month,
as measured by the Understanding
maximum fluctuation of l per cent
month. Every year would produce IL
kinds of gold dollars. What a Babel OF
Moneys!
Prof. Fisher, in his book, "Stabilizing
the Dollar" says:
II do not think that any sane man,
whether he accepts the theory of money
that accept will deny that the weight
of gold in a dollar has a great deal to
do with its purchasing power. More
gold will buy more goods"
Certainly
The fallacy of that argument lies in
the fact that the gold dollar never re-
Sfr frO,, re <fo hut Hn
stamp merely testifies that the amount
of gold it contains is to be called
dollar. If tomorrow the Fisher law
counts more gold a dollar, the relation
of an ounce of gold to a unit OF index
commodities has not changed one whit,
but nomenclature has shifted-that's
all. And Babel confusion has wrought
havoc in finances, for no two dollars
could understand each other.
x X
In pamphlet by Mr.. B. M. Ander-
son, jr., economist of the Chase Ma
tional Bank of New York, Prof. Fisher
is answered as follows:
1T is Prof Fishers contention that
all changes in the general average in
commodity prices are due to instability
in the dollar. The business man thinks
that when prices rise or fall 1t Is the
goods which are rising and falling, while
the gold dollar remains stable. Prof.
Fisher maintains that the general aver
age of goods remains stable, while the
dollar rises or falls. He has likened
this economic doctrine to the Coperni-
can system of astronomy. The old
Ptolemaic system of astronomy taught
that the sun moved and the earth stood
still. The Copernican system teaches
that the apparent movement of the sun
as we change from day to night is il
luSory and that it Is the earth that is
revolving"
That is an unfortunate reference to
CopernicuS, so far as it is expected to
support Prof. Fisher, for Copernicus
was one of the first three scientists to
Bishop of LiSieux, Normandy, stated
the fundamental law of money to
Charles the Wise of France, and Nico-
lauS CopernicuS of Thorn, in Prussia,
the diScoverer of the Copernican theory
OF astronomy, eXpounded the same law
Of currency to Sigismund the First of
Poland. and Sir Thomas Gresham, an
! English merchant, explained it to Queen
Elizabeth in what we recognize as the
Gresham law" under which, when
ever there are two kinds of money in
existence, the cheaper money will al
ways drive out the dearer money.
So, If we adopt the Fisher dollar, in
creasing or decreasing its gold content
by l per cent a month, to keep pace
with war prices or a fuctuating market
due to any cause, the better dollar will
be sent into hiding, while debts will be
paid by the cheaper dollar. Result, our
gold will leak out of the country, until
all that we have left will be our fiat
money which we will be unable to re-
deem in gold, for gold will have disap-
peared-melted for its bullion value or
exported for its greater purchasing pow
er abroad.
/ Sound money gets its soundness from
the integrity behind it-not inflated
fat false credit, but the honesty and
truth of the statement Of its basic cred
it. If the stamp says that a definite
weight of gold of a definite assay is in
the coin, then the same stamp must not
say some other weight and assay are the
same. To say that is to falsify. To
falsify is to drive honest money into
hiding, according to the Oresme-Co-
pernicus-G Gresham law.
While this Gresham law was not
recognized by moderns before Queen
Elizabeth's day, 1t was known even in
ancient Greece, as it is expressed by
AriStophaneS, the famous comic poet, in
his drama Of Frogs:
"Oftentimes have we reflected on Q
| similar abuse
In the cno1ce OF men Tor ONCE, ana OF
coins for common use;
For your old and standard pieces, val
ued and approved and tried
Here among the Grecian nations, and
in all the world beside,
Recognized in every realm for trusty
II stamp end pure assay,
Are rejected and abandoned for the
] trash of yesterday;
For vile, adulterate issue, drosSy, coun-
terfeit and base,
Which the traffic Of the city passes cur
Il rent in their place"
(Copyright, 1923, by Paul v. CoIlins.) j.