Page:Stabilizing the dollar, Fisher, 1920.djvu/160

106 3. Artificiality of a Fixed-Weight Dollar

At present, with a dollar always containing 23.22 grains of gold, the price of gold is always $20.67 an ounce. However far gold may really depreciate, our artificially defined dollar creates an artificially fixed price for gold. It does not allow gold depreciation to show itself in a lowered price of gold. Consequently it shows itself abnormally,—in the raised prices of other things.

It is both wrong and absurd thus to force these other things to register the fluctuations in the value of gold. When gold depreciates, its price should be reduced. Furthermore, when we see the price of anything else, say corn, rising, we ought to be able, as we are not now, to be reasonably sure that all of this rise represents a rise in that corn and not some of it a fall in gold. Reversely, when gold appreciates, its price should be raised; and when the price of anything else falls it should represent wholly a fall in that particular commodity, not partly a rise in gold.

At present the Government is not authorized by law to mark gold down when it goes down, nor up when it goes up. The grocer can mark his goods up or down. He can increase or decrease the number of pounds of sugar he will give for a dollar. But the Government is helpless.

When a flood of gold pours in from Cripple Creek or the Rand, or from war-ridden Europe, the Government is not permitted to increase the weight of a dollar's worth of gold above 23.22 grains or to decrease the price of gold below $20.67 an ounce. Instead, therefore, there is a redundant currency and a "high cost of living."