Evening star., 1933-11-28
Index Dollar Proposed
As Solution of Problem
To the Editor Of The Star:

To the Editor Of The Star:
There is one simple way Of stabilizing
the dollar, q way that should satisfy
alike the sound money man, the advo-
cate of commodity dollar, and the So
called infiati0nists, way to satisfy alike
the borrower and the lender.
Everybody knows the evils to be
corrected. They may be stated in a
paragraph:
If you lend a dollar that buys a
blIshel Of potatoes and receive in pay
ment later a dollar that buys three
pecks you have been robbed Of a quar-
ter-if you care to buy nothing but
potatoes. If you receive a dollar that
buys five pecks the borrower has been
robbed-by the same reasoning. Switch
the figure from potatoes to "a dollars
worth Of living" food. clothing lodging
and entertainment) and the same thing
holds good.
To correct this evil let us follow
Prof. Irving Fishers plan-but for a
very little way. He took one foot of
lumber, one fortieth of bushel of
wheat. small portions of sugar, cotton
petroleum. etc. etc. one commodity
after another until he had a quantity
OF stuff that could be purchased for a
dollar at the time he made his Calcula-
tion. He did not say. These things
have the value of dollar. He said
These things are a dollar. This COL
lection shall be our monetary unit"
But because it was out of the ques-
m tnt Ot 6ar
things, one-hundredth part of a pair
of shoes and three quarters of pound
of hay when he went to buy theater
tickets, he worked out very elaborate
plan. Boiled down it meant that in
stead of having dollar fixed in weight
and varying in purchasing power he
would have dollar varying in weight
gold conten) and fixed in purchasing
power.
1t is this plan with some startling
modificationS) that the Government is
now wrestling with: startling because
the Government IS not content to start
from scratch but is endeavoring to
right yesterdays wrongs.
1t is small wonder that one-half the
population is vaguely alarmed and the
other half just as vaguely hopeful.
The quaSi-science OF economies" says
Recovery Administrator Hugh S. John
son, lis just a tangle of conjecture,
There Is something plaintive and Just
little wistful in that declaration.
But in the tangle of conjecture the
thoughtful man may discover some
few straight leads
Let US suppose that the Federal or
State Department of Labor. or the
Chamber OF Commerce, national. State.
county or municipal, established an
index number based on the value of a
certain number of commodities: and
that that index number as of, say, Jan
uary !, 1884. is 100 and signifies "a
dollars worth of living" If on June
l, 1884, it takes 81 OF to buy "a dollar
worth of living" the index number be-
comes l02. II "a dollars worth OF liv-
ing" can be purchased for SO cents
the index number becomes e8
Well, then, when I borrow money I
promise to pay index dollars If when
! go to pay the dollar I owe the index
number is 81 l pay 81 cents. If it is
103 I pay Sl.03. In either case am
paying for the dollars worth of liv-
ing 1 borrowed. no more. no less.
tThis. of course, is entirely apart
from the interest which, for the sake
OF convenience, may be based on the
actual rather than the index or con-
tract dollarD
1t is easy to see how the principle
can be worked out for landlord and
tenant, employer and employe Writ
ten contracts would call for the pay
ment OF certain number of index dol
lars at certain specified times.
1t is a plan fair alike to borrower
and lender, employer and employe
merchant and consumer, banker and
bank patron. And, Furthermore. it
doesn't require any new laws nor any
complicated machinery.
GRIFFITH ALEXANDER,