Page:Stabilizing the dollar, Fisher, 1920.djvu/276

222 such a shift to the Government of all private gains and losses were really effected by stabilization the net resulting burden on the Government would be just zero! For the same number of dollars that the private creditor now loses from depreciation the private debtor gains and vice versa.

This is the reason that, above, in referring to contracts, the phrase "losses and gains" was used whereas, in referring to physical gold, the phrase "losses or gains" was used. When gold depreciates its holders suffer loss and no one else has any corresponding gain, just as when a case of eggs or a box of fruit spoils the owner loses and no one else gains. Contrariwise when gold appreciates the owner of gold gains and no one else loses.

This slight gain or loss from holding gold is transferred, by the stabilization plan, to the Government (or rather, is transferred from the pockets of the people back to their pockets through increase or decrease of taxation) as was shown in Appendix I, § 1, D. But the colossal gains and losses to contracting parties are not so transferred by stabilization. They are simply destroyed altogether.

K. "It would make a pretext for raising prices." This idea is probably an echo of the fact that dealers have often used the excuse that prices in general were high to raise their own. The excuse was usually valid. Retail prices must adjust themselves to wholesale prices and vice versa.

But it is precisely this excuse which the stabilization system would take away; for the general price change which it presupposes is avoided. It would certainly be a curious excuse for a dealer to tell his customers that he had to change the price of coal because, last month, the mint price of gold had been changed with the expressed object of making such changes in other prices unnecessary!

L. "It would 'tamper' with the standard of value." In truth it would prevent the standard of value from