Page:Stabilizing the dollar, Fisher, 1920.djvu/143

4] the spot. When a man was about to make a cash purchase it was immaterial to him what the monetary unit was.

But to-day if a man buys an article and promises to pay for it in three months, the case is different. When the time for payment arrives it is very important for him to know whether the "dollar" is the same as was contemplated when the agreement was made.

With our modern contracts, running months, years, generations, or even centuries, including hundreds of billions of dollars' worth of agreements to pay money,—promissory notes, mortgages, debentures, railway bonds, Government bonds, leases, insurance contracts, etc.,—the function of a standard of value, that is, a standard of deferred payments, has grown to be perhaps the more important of the two functions of money.

Yet because our ancestors found a good medium of exchange we now find ourselves saddled with a bad standard of value. What we need to do, therefore, is to retain gold as a good medium and yet to make it into a good standard; not to abandon the gold standard but to correct it ; not to rid ourselves of the gold dollar, but to make it conform in purchasing power to the composite or goods-dollar.

Under the plan about to be presented, gold is retained; and there is essentially the same mechanism by which it freely enters or leaves the circulation. But under this plan the gold dollar becomes a standard of value instead of a standard of weight.

We now have a gold standard with the "standard" left out! When I am asked with a horrified air, whether this proposal is not really one to "abandon the gold standard" I like to answer: "No! it is to put the