Page:Stabilizing the dollar, Fisher, 1920.djvu/270

216 bullion from which it is made, than to believers in the quantity theory.

It will be clear to any one who follows the reasoning and explanations in this book, that the only money theory assumed is that common to all theories, and accepted universally; namely, that a large quantity of gold will buy more goods than a small quantity—a pound, than an ounce, for instance—and that an increase of the gold in a dollar will, somehow, increase the dollar's purchasing power. As to the exact process by which this acknowledged result is attained we need have no concern.

Personally, like the great majority of economists, I believe that this process is through the fact that increasing the weight of a dollar decreases the number of dollars in circulation (not only of gold but of fiduciary money and bank credit). But any one who reasons on some other theory cannot avoid reaching the same result; namely, that the plan would work, provided, as I have said, he admits simply that the heavier the dollar the more valuable it is.

To take an example cited in Chapter IV, if the Mexicans should change the weight of their dollar to the weight of ours, the price of wheat and other things would become about the same on both sides of the Rio Grande, just as they are at present (except for the tariff) the same on both sides of the Canadian border where the dollar is of the same weight on both sides.

E. "It contradicts the quantity theory." This objection, the opposite of the last, has been raised by some who believe in the quantity theory but imagine that the operation of the plan could not affect the quantity of money at all or not in the degree needed. But, as explained in the text (Chapter IV, § 9, and Appendix I, § 9), it is not assumed that a 1% change in the weight of the gold dollar will necessarily affect