Page:Stabilizing the dollar, Fisher, 1920.djvu/306

 APPENDIX III

ALTERNATIVE PLANS

1. A Sound Alternative

A. Introduction. This book was written not so much in behalf of the specific plan described, which is regarded as the most practicable, as to show that the problem of stabilizing the dollar and the price level is soluble.

Many readers would like to know what alternative plans have been suggested. Of these the only one which seems worthy of careful consideration is that suggested, in a conversation with me, by Professor Gilbert N. Lewis, Professor of Chemistry of the University of California. He asked if it would not be possible to have paper certificates redeemable in the actual goods-dollars instead of in their gold equivalent. It would, of course, be impracticable literally to maintain the "free coinage," i.e. deposit, of goods-dollars for certificates on the one hand and the free redemption of these certificates in goods-dollars on the other; because these goods-dollars would be too heavy, bulky, and perishable to use as reserve, as well as for other reasons. Nevertheless it would be entirely practicable to secure the desired regulation of the quantity and value of paper certificates by a simple device for indirect issue and redemption.

Such a system would first be launched by the conversion of our present gold certificates into certificates entitling the bearer to redemption in goods in accordance with the plan described below. All other 252