Page:Money by Lang, George S.djvu/14

 as it represents domestic demand and has no particular lien, it will be taken to meet and balance domestic supply wherever that exhibits a surplus that will pay transportation and commission. Yet, as the money unit of the United States will not be that of any other country, foreign exchange will continue to be governed by the American price of foreign money. It is said, that as other countries base value on gold, we must do the same, otherwise how is foreign exchange to be balanced. Foreign exchange is to be balanced after true money is established, just as it always has been, and always will be, with whatever currency; that is, by calculations, requiring familiarity with the primary rules of arithmetic, and with the weights, measure and monies of the nations in question. If we postpone wise action until every body else is wise, what will be the result? International arrangements are pretty play things. But the true rule of action is wisdom. Be sure you are right, then go ahead, let others follow. Others will follow, but followers are always behind.

It is also said that by returning to the gold rate, whatever that is, commodities will be as cheap as formerly. This theory is based on the practice of accepting "cheap" and "low priced" as synonymous. Cheapness is due to increase of the supply of commodities; low prices are due to decrease of the rate of the dollar. Thus commodities may be at once high priced and cheap, or low priced and dear.

Formerly the average rate of the dollar, for a number of years, was six per capita. To adopt this rate will be to reduce the nominal value of wealth in the ratio of sixteen to six; and at the same time to increase the value of debts public and private in the ratio of six to sixteen. These are results not of speculation but of calculation, and are therefore as certain as that two and two are four, though they are not always apparent. They are not apparent at present, chiefly because our bonds being good for six per cent, interest in gold, there is a large demand for them in Europe, consequently they serve as a substitute for gold in payment of imports, and will do so until the foreign demand for gold equals that for bonds.

When Government takes the responsibility of supplying a true