Page:Stabilizing the dollar, Fisher, 1920.djvu/325

. 1] In any case, we shall gradually come to feel that our technical prevention of "depreciation" was a hollow mockery, that we have erred in thinking of depreciation as relative to gold instead of as relative to commodities.

The many adjustments of wages during the war by an index number of prices are really a confession that the dollar does change and needs correction. In the future, there will be a cumulative effect on the minds of business men from the tell-tale index number. It will increasingly impress upon them the fact of the dollar's instability and ultimately make some real stabilization inevitable. It will gradually dawn on the public that if the dollar needs correcting the correction should be incorporated in the dollar itself instead of being patched on from the outside.

Just now this problem of the price level is very real and insistent. Business men will long remember that, for months after the ending of the Great War, there was hesitation, amounting almost to paralysis, owing to uncertainty as to the future level of prices. Abroad, the problem of the price level is even more acute, for inflation there proceeded much further than it did here.

Many expect prices to drop. A well-known and influential business man has said that our present high prices continue "without the slightest reason under the sun." There is, however, an uneasy feeling that a fall of prices would be as uncomfortable as was the rise.

Thus, in one way or another, the Great War has demonstrated anew the instability of monetary standards. The present gold standard, supposedly so solid, has been largely discredited in the eyes of many people and we hear of various proposals to replace it by something better.

In view of all the facts, we may reasonably expect that the money fog in the public mind will be more nearly dispelled during the period immediately ahead of us than at any former time in history; first, because the rise in prices has been one of the most rapid and