Page:Stabilizing the dollar, Fisher, 1920.djvu/145

6] could doubt that its purchasing power would rise about twofold, that is, the price level in Mexico would fall about half. Likewise, if we should adopt the Mexican dollar, our prices would about double.

Let it be granted, then, that according as the gold dollar is heavier or lighter, the more or the less will be its purchasing power. It follows at once that, by adding new grains of gold to the dollar just fast enough to compensate for a loss in the purchasing power of each grain (and, of course, reversely, taking away gold to compensate for a gain), we can secure a stationary instead of a fluctuating dollar, in terms of purchasing power.

6. No Gold Coins to Be Used

Before the reader can accept the statement just made that the problem of stabilizing the dollar is soluble by varying the dollar's weight he will want to have three questions answered: Is it practicable to vary the gold dollar's weight periodically? By what criterion is the variation to be made? Will that variation actually stabilize the dollar?

First, as to the first question: How is it possible, in practice, to change the weight of the gold dollar or other monetary unit?

The feat is certainly not impossible; for it has often been accomplished. European history affords numerous examples. The Philippine peso was changed only a few years ago. We ourselves have changed the weight of our gold dollar twice; once in 1834, when the gold in the dollar was reduced 7%, and again in 1837, when it was increased one tenth of one per cent. If we can change the weight of a monetary unit once or twice a century, we can change it once or twice a month!