Page:Stabilizing the dollar, Fisher, 1920.djvu/308

254 be to license a number of such agencies, say one for each commodity. In this case, the most natural agencies would be existing large dealers in the various commodities concerned, a lumber merchant for redeeming lumber warrants, a wheat dealer for the wheat warrants, a coal dealer for coal, etc.

Nor do we need to discuss, in detail, the method by which the Government would reimburse any agencies it employed. It could pay lump sum retainers or the actual costs involved. The method simplest to understand would be for the coal dealer, for instance, after honoring a warrant for coal, to present a bill for said coal, at current prices, or at contract prices, to the Government, accompanying the bill with the warrant as evidence of the validity of the bill. This arrangement would be like that made for tourists by "Cook's" and other companies which sell warrants for meals and lodgings which are honored by hotels and later sent back to Cook's with bill for services rendered.

C. Unrestricted Redemption via Warrants. Whatever may be the business arrangements best suited for providing a working mechanism by which the Government would redeem certificates in the particular commodities which the certificates represent, our present interest lies in the working of that mechanism to stabilize the dollar.

The essence of the operations described is that certificate dollars are freely redeemable in goods-dollars (via warrants).

Such redemption would serve to correct any incipient depreciation of the certificate-dollar relative to the goods-dollar.

For, if the index number should rise much above par, i.e. if, in the open markets, the collection of goods constituting one thousand goods-dollars cost much more than a thousand dollars of certificates, recourse would be had to redemption. Speculators or warrant-brokers would arise who would find it profitable to gather together, say, $100,000 in certificates, redeem them in