Page:Stabilizing the dollar, Fisher, 1920.djvu/235

8, E] of the stabilization principle. This might come about either at once by concerted action or gradually by individual action.

With a league of nations, joint action in such matters will be far easier than ever before; and we must not forget that there was joint action once in the case of the "Latin Union" which maintained bimetallism. In this case France, Belgium, Switzerland, Greece, and Italy joined in a uniform standard of currency based on gold and silver. The present exigency will create a powerful motive toward some such action.

The war has upset the monetary standards of the whole world and has brought forward the questions of resumption, deflation, high cost of living, and price movements generally. All of these are related to the more fundamental question of a standard of value, of which that of stabilization is an unescapable part.

Monetary standards already constitute an international question because, under our present system, any disturbance in the price level in one country necessarily affects the price levels of the rest.

If the stabilization plan were adopted internationally, there should, of course, be a common index number. This would not sacrifice greatly the accuracy of adjustment for any one nation; for we have already seen that the index numbers of different countries having the same monetary standards are very similar and we know that, with the future development of international trade, there will come about an even closer harmony of price movements.

In case joint action could not be secured at the outset, individual action by one country, especially if that country were the United States, would, almost certainly, lead to the general adoption of the plan.

Objectors point out that this was not true of bimetallism. Their argument is that if an agreement on international bimetallism could not be secured we cannot hope to secure anything so ambitious as an