Page:Stabilizing the dollar, Fisher, 1920.djvu/213

4] name and this implies that we should not permit any undue appreciation of our dollar.

For various reasons, therefore, in starting the new and permanent level of prices, we cannot, very well, advocate any drastic departure from the level at which we happen to be when the start is made. In short, we ought not to start with a serious jar.

This does not mean that we must adopt the exact level of the moment.

We must take care to do justice as between the then existing debtors and creditors. To these particular debtors and creditors this question of the start-off is vital.

We cannot now say, of course, what the price level will be when the new system shall begin. All that can now be done toward deciding what the start-off should then be, i.e. what par or particular price level is thereafter to be maintained, is to point out the principles which should guide us.

If the time of adoption of the plan should happen to come after a long steep rise of prices, such as in 1919, 1873, 1865, or 1814, it is clear that the price level then existing would be too high to afford a just and proper starting point and that a somewhat lower level ought to be selected to which we should deliberately descend. Otherwise most outstanding debts would have to be paid in terms of a dollar of less value than the dollar contemplated when the debts were contracted, before prices were so high.

On the other hand, if the time of adoption of the plan should happen to come after a long steep fall of prices, such as in 1896, 1849, or 1821, the price level then existing would be too low to afford a just and proper starting point and a somewhat higher level ought to be selected to which we should deliberately ascend. Otherwise most outstanding debts would have to be paid in terms of a dollar of greater value than that contemplated when the debts were contracted, before prices were so low.