Page:Stabilizing the dollar, Fisher, 1920.djvu/91

11] by reference to the fact that "the price of gold" never changes. Only recently a former Government officer asserted that the value of gold is evidently constant because its price is fixed!

I once asked a dentist if the "high cost of living" had affected the price of his materials.

Yes, of course," he replied.

"Of the gold you buy for fillings?" I ventured jokingly, expecting him to know that this could not be.

To my surprise, he answered, "I suppose so," and sent his assistant to look the matter up.

She returned presently and solemnly informed us that the price he was paying for his gold was substantially the same as it always had been.

"Isn't that surprising!" he exclaimed, "gold must be a very stable commodity."

"It's just as surprising," I replied, "as that the price of a quart of milk is always two pints of milk."

"I don't see the point."

"Well, what is a dollar?" I asked.

"I don't know,—what is it?"

That question is vital. The almost universal ignorance of the answer is chiefly responsible for the almost universal misunderstanding of the high cost of living and the ups and downs of the dollar's worth!

A dollar is defined by statute as 25.8 grains of "standard" gold (that is, of gold of which 900 parts out of 1000 are pure gold). Consequently the actual pure gold in a dollar is $$\tfrac{9}{10}$$ of 25.8 grains or 23.22 grains. Since an ounce is 480 grains, the number of dollars in an ounce of pure gold is $$\tfrac{480}{23.22}$$ or 20$$\tfrac{67}{100}$$ dollars. In other words, any lump of gold containing one hundred