Page:Stabilizing the dollar, Fisher, 1920.djvu/234

180 the stabilization plan unless we count as an inconvenience the fact that the "gold points" of exchange would, under certain conditions, be wedged a little further apart (by the amount of the brassage) than at present. Even this would not happen so long as conditions were such that in both of the countries gold is flowing into circulation and not out (or, in both, out and not in) so that the price of gold within each country remains continuously at the lower (or continuously at the upper) of the two limits set by the brassage and discussed, in another connection, in § 2 above.

Under these conditions, a periodical shift in the official prices of gold would not widen the gap between the gold shipping points; it would merely raise or lower them both in unison. Nor would the reversal of the golden stream from an inflow into circulation to an outflow from circulation widen that gap, provided the reversal took place simultaneously in both countries. Only when it happened that gold would flow into circulation in (say) the United States and out of circulation in (say) England, would the gold shipping points between the two countries be spread apart by the amount of the brassage.

By proper international arrangements as to exchange, even this occasional result could be avoided. The international exchange could be itself stabilized at Government expense as has been done during the war.

E. The Adoption of the Plan Would Spread. Thus, on the merits of the question, there is little or nothing to be said against stabilization by one country alone, while its advantage to the country adopting it would be very great indeed. In this connection I may call attention to a recent dispatch from London which says: "English capitalists are certain that the country which first succeeds in reorganizing its currency will be able to obtain a large share of international business."

Sooner or later the perception of the advantages of stabilization would probably lead to the general