Page:Stabilizing the dollar, Fisher, 1920.djvu/142

88 used for export or import! With its 15 lb. of coal, it is far too heavy to carry; with its wood and hay, it is far too bulky; its half egg would spoil; while to divide a pair of shoes into two hundred parts would annihilate their value. Gold is to be preferred because it is imperishable, easily divisible, easily portable, and easily salable.

And these are precisely the attributes which led to the selection of gold; and not, as some people mistakenly assume, any attribute of stability.

By all means, then, let us keep the metal gold for the good attributes it has—portability, durability, divisibility, salability—but let us correct its instability, so that one dollar of it will at all times buy approximately that composite basketful of goods. Under the plan proposed only the gold dollar, duly corrected, is to be actually handled. The goods-dollar is merely a fiction in terms of which we may statistically test and correct the gold dollar.

Money to-day has two great functions. It is a medium of exchange and it is a standard of value. Gold was chosen because it was a good medium, not because it was a good standard.

The contention that gold became money because it was thought to be a good standard of value is an unfounded myth. Indeed, when it came into use as money, there were no index numbers and there was therefore no way of testing its stability or instability; and finally at that time there was not much need and not much thought of a standard of value, for the good and sufficient reason that there were few, if any, time-contracts, such as promissory notes, mortgages, and bonds. Almost all bargains were struck and settled on