Page:Stabilizing the dollar, Fisher, 1920.djvu/282

228 in future wars, stabilization would deliver us; for, as shown (Appendix II, § 1, I), the only result of an influx of gold would be to make our gold dollars larger. Our price level would remain intact, for the neutral would not be under the necessity of paper and credit inflation as a fiscal expedient.

Another sort of answer to this objection is the League of Nations! We are not likely for a long time, if ever again, to have such an exigency as a World War. In short, the full answer to the objection of inadequacy in war time is:

(1) In all ordinary wars stabilization would be adequate.

(2) Wars in which it would not be adequate are now extremely unlikely

(3) In such an emergency the system might still work "at half speed," which would be better than nothing.

(4) Or, it could, if necessary, be suspended, which would leave us no worse off than under the present system.

(5) It would, in any case, safeguard the standards of non-belligerent nations.

(6) In no case would it leave us worse off than before.

D. "It could not check rapid changes." Owing to the narrow limits, e.g. 1% or 2% as stated, imposed on bi-monthly adjustments of the dollar's weight, it is quite true that a sudden and strong tendency of prices to rise or fall, should such occur, could not be completely checked. If, for instance, prices were tending to rise 18% per annum and the plan permitted no more rapid shift than 12% per annum, this would leave 6% per annum uncorrected.

But this 6% would be only one third the rate at which prices would rise if wholly uncorrected. Half a loaf (or, in this illustration, two thirds) is better than no bread.

Moreover, such cases are extreme and rare. When they do occur there is all the keener need for their