Page:Stabilizing the dollar, Fisher, 1920.djvu/315

6] and, as shown under "precedents," in Appendix V, it has in a number of instances, notably during the Great War, been actually employed.

The proposal is, not to change the monetary standard itself but to correct its injustices in any contract by supplementary payments from the debtor to the creditor or vice versa according to an index number. If a debt for $1000 were contracted in 1900 and paid in 1920 and if the index number in 1920 were 250, on the basis of 100 for 1900 the debtor who had engaged to pay by the tabular standard would, in 1920, owe 250% X $1000, or $2500; that is, he would supplement the $1000 which his debt calls for by $1500 under the tabular standard agreement.

This plan would, apparently, accomplish everything which the plan proposed in this book would accomplish and without disturbing our monetary system in the least.

Practically, however, it would never accomplish more than a small fraction of what a true stabilization of the dollar would accomplish and, if widely used, would really cause considerable disturbance, of one sort and another.

As a makeshift in an emergency this plan is worth while, especially for correcting wages, but its inconveniences stand in the way of a wide adoption, especially in ordinary times. In the absence of a real standardization I favor it most heartily and hope that it may serve as a stepping stone toward something better.

The two chief objections are (1) the inconvenience of calculating (which would be like that which would be caused if we were to use as our yardstick of length the height of a barometer and had to employ a new correction factor each day for selling cloth) and (2) the trouble which would come from the fact that the tabular standard would only be partially employed. Thus