Page:Stabilizing the dollar, Fisher, 1920.djvu/43

Rh in circulation as the gold's proxies. The outflow is to jewelers and exporters who redeem certificates and withdraw the gold. These essentials would remain unchanged, but the terms for depositing and withdrawing gold would be changed.

8. Periodical Variations of Weight Based on Index Numbers. The changes in the dollar's weight would not be left to discretion but would obey the index number of prices. Every two months, say, this index number would be calculated representing what the imaginary basket of goods, called the goods-dollar, actually costs. If this basket costs 1%, or 1 cent, more than a dollar, 1% more gold is added to the dollar. If it costs 1% less than a dollar, the dollar is lightened 1%.

9. How the Adjustment Rule Would Work. It is not assumed that such corrections would necessarily be complete or final. But, if not, the next calculation of the index number would tell the tale and further correction would then occur. There would always be some deviation from par, but it would always be in process of correction, just as an automobile never remains in the exact direction desired but its deviation from the true path is being corrected as fast as it is made evident. Thus the gold dollar would keep close to the goods-dollar; every other dollar (the paper dollar and the deposit dollar) being redeemable, directly or indirectly, in the gold dollar, would be equivalent thereto.

10. Proviso against Speculation at Expense of the Government. The government would charge say 1% "brassage" for deposit of gold and no one change in the dollar's weight would exceed that brassage. This would prevent speculation in gold embarrassing to the Government. This proviso and other technical details are elaborated in Appendix I, § 1.