United States dollar

“ So long as any paper money issued or authorized by the United States Government is accepted in commercial use as the equivalent of the best coined dollar that we issue, and so long as every coined dollar, whether of silver or gold, is assured of an equivalent value in commercial use, there need be no fear as to an excess of money. The more such money the better. But, on the other hand, when any issue of paper or coined dollars is, in buying and selling, rated at a less value than other paper or coined dollars, we have passed the limit of safe experiment in finance. ”

“ If we have dollars of differing values, only the poorest will circulate. The farmer and the laborer, who are not in hourly touch with the ticker of the telegraph, will require, above all other classes of our community, a dollar of full value. Fluctuations and depreciations are always at the first cost of these classes of our community. The banker and the speculator anticipate, discount, and often profit by such fluctuations. It is very easy, under the impulse of excitement of the stress of money stringency, to fall into the slough of a depreciated or irredeemable currency. ”

“ With much more rea­son Americans might have suspected that in Amer­ica Englishmen found everywhere a silent influence, which they found nowhere in Europe, and which had nothing to do with avarice or with the dollar, but, on the contrary, seemed likely at any moment to sacri­fice the dollar in a cause and for an object so illusory that most Englishmen could not endure to hear it discussed. ”

“ Now, you all know that the money in circulation in the United States—all of it—is good, good as gold. It will pass everywhere and buy as much as the same amount of any other money in the world. Our money is of many kinds—gold, silver, nickel and copper are all coined into money. Then we have United States notes, or greenbacks, gold certificates, silver certificates, treasury notes and national bank notes. But the virtue of all these many kinds of money is that they are all good. A dollar of each is as good as a dollar of any other kind. All are as good as gold. ”

“ As the shilling is really the retail unit of the British Empire—except in Canada and India—and has very nearly the value of our quarter, but little difficulty could be experienced by England and her colonies in changing to the dollar and a decimal system. Altogether the way seems very clear to us, but national pride in a coin, and national habits of long standing, are difficult matters to overcome. Perhaps the best argument in favor of the dollar is the rapidly growing financial preponderance of the United States and North America in general in the commercial world. ”

“ There still remains to be considered the effect of depreciated currency on our trade with other nations. By raising prices at home higher than they are abroad, imports are largely increased beyond the exports; our coin must go abroad; or, what is far worse for us, our bonds, which have also suffered depreciation, and are purchased by foreigners at seventy cents on the dollar. ”

“ Every dollar issued by the Government, or by national banks under government authority, passes current like gold. Indeed the ease with which it can be transported and the certainty of its redemption makes the paper money of the United States better than gold. ”

“ As Dr. A. C. Miller of the Federal Reserve Board has said, "Inflation is no less inflation when gilded with gold."
10. Extent of War Inflation
On the whole, the money in circulation in the United States rose from three and one third billions in 1913 to five and a half billions in 1918, and bank deposits from thirteen to twenty-five billions, both approximately corresponding to the rise in prices. ”

“ Our dollar is now altogether too greatly influenced by the accidents of international trade, by the internal policies of other Nations and by political disturbance in other continents. Therefore the United States must. take firmly in its own hands the control of the gold value of our dollar. This is necessary in order to prevent dollar disturbances from swinging us away from our ultimate goal, namely, the continued recovery of our commodity prices. ”

“ Illusions, popular, in regard to money, 35-39; methods of emancipation from, 41-44.
Index numbers, a device to measure movement of prices, 1-2; method of determining, 2; effect of weighted averages on, 2-3; various systems of, 4; index number of United States Bureau of Labor Statistics, 4; history of, 5; price movements since 1780 as measured by, 6-8; to be a guide in making proposed changes in dollar's weight, 95-96; lack of, a reason for overlooking plan for stabilizing the dollar, 113-114; how to select right type of, to carry out stabilization plan, 147-154 ”

“ As we are now shaking off the inconveniences of a depreciating medium, the present moment seems to be that, in which a general currency can best be established, so as that in a few months, the same names of money will mean the same things in the several parts of the United States. ”

“ The grounds, upon which the general power to coin money, and regulate the value of foreign and domestic coin, is granted to the national government, cannot require much illustration in order to vindicate it. The object of the power is to produce uniformity of value throughout the Union, and thus to preclude us from the embarrassments of a perpetually fluctuating and variable currency. Money is the universal medium or common standard, by a comparison with which the value of all merchandise may be ascertained, or, it is a sign, which represents the respective values of all commodities. ”

“ So considerable an addition to their money-stock would raise prices in those countries, and by remaining there, would, with the current production, which we could spare to them, tend to maintain prices at a steady level. Such a condition would be an inestimable boon to the overburdened masses of Europe, and their prosperity would not be attained at the expense of the people of the United States. ”

“ Likewise the degree of civilization to which a country has attained is reflected by the perfection of its monetary machinery. After having tried nearly every unwise experiment condemned by the teachings of history, the United States has finally reached a position where its currency meets the two fundamental requirements of sound finance, namely, (1) the standard of value is that in use among the great commercial states of the world; (2) all of the currency is either directly or indirectly convertible into the standard coin. ”

“ Under such conditions all parts of the circulating medium tend to expand or contract in unison and a change in weight of the basic gold dollar carries with it a control of the whole mechanism of exchange, cash, and credit. ”

“ At certain times there are greater and less demands for money, which, under our present practices, make a dollar, to-day, worth four per cent. per annum interest, and to-morrow increase it to ten per cent. It must be remembered that we are now speaking of an irredeemable currency, the representative of the wealth of the nation: that the government representing the nation has uttered it, in behalf of the people, upon the soundest and, in reality, the only sure basis of value any money can have—the productive power and capacity of the nation. ”

“ The cautious and conservative reader will ask: if the evils of our present dollar are so great and the remedy so simple, why did not our civilization improve its monetary units years ago, as it improved all other units? ”

“ There is a fourth: we prevent a loss or gain in the purchasing power of the dollar by lowering or raising the price of gold. All four modes of statement may be united as follows: For most people I think the original formulation (the 4th paragraph of the summary above) is the most convenient, namely, the one in terms of the price level and dollar's weight rather than in terms of the purchasing power of the dollar or the price of gold, or both. ”

“ In other words, there has been a greater increase in money than appears from the United States figures by the amount which has overflowed into foreign lands. The United States is only a small part of the world's market, and its price level is largely determined by the world's price level. ”

“ Under the most favorable state of trade between the east and west an exchange of one per cent. was demanded from drafts and bills of exchange. With a national currency, uniform and equal throughout the country, this cost for exchange would not exist or would be greatly reduced. I called attention to the then increasing volume of local currency in the United States. When the United States had issued $250,000,000 of notes, the banks had largely increased their circulation. ”

“ To-day we have at Washington a Bureau of Standards where the modern yardstick is determined by a bar of metal alloy kept in a room of constant temperature, under a glass case, and not approached by the observer, lest the warmth of his body should cause it to vary, but sighted by a telescope across the room!
Except the dollar, none of the old rough-and-ready units are any longer considered good enough for modern business. The dollar is the only survival of those primitive crudities. ”

“ Prior to that series of unfortunate measures which had for its object the overthrow of the bank of the United States, and the discontinuance of its fiscal agency for the government, no people upon earth ever enjoyed a better currency, or had exchanges better regulated, than the people of the United States. ”

“ Even if our shifting dollar were guiltless of most of the offenses charged, even if the high cost of living had no relation to the dollar, there would still be excellent reasons for standardizing it—on the same general principle on which we have standardized all other units. ”

“ This the proposed currency will be by right of use,—a right inherent in a national currency, and respected as long as the government respects itself, that is, as long as the people govern wisely.
A dollar, value-currency, will always buy a dollar's worth of gold, but it may not always buy the quantity of gold contained in the gold dollar. ”

“ The first symptom of the depreciation of our present paper-money, was that of silver dollars selling at six-shillings, which had before been worth but five shillings and nine pence. The assembly thereupon raised them by law to six shillings. As the dollar is now likely to become the money-unit of America, as it passes at this rate in some of our sister states, and as it facilitates their computation in pounds and shillings, & e converso, this seems to be more convenient than its former denomination. ”

“ That the Bridgeport Chamber of Commerce, recognizing the many evils that flow from the ever-changing value of the dollar, hereby calls upon Congress to enact such legislation, if it be feasible, as shall tend to make the dollar stable at all times in its purchasing power ; and to that end it respectfully recommends the adoption, in substantial form, of the plan put forward by Professor Irving Fisher for stabilizing the dollar by adding weight thereto or subtracting therefrom in accordance with the fluctuations of prices as represented by the index numbers. ”

“ By the latter the currency is enlarged at the expense of the people,—being at once a tax and a derangement of values. You pamper the morbid appetite for paper money, and play the discarded part of John Law. You blow up a bladder, without thinking that it is nothing but a bladder, ready to burst. As the volume of currency is increased, the purchasing power of each dollar is reduced in proportion. As you add to the currency, you take from the dollar. You do little more than mark your goods at [Pg 293] higher prices, and imagine that they have increased in value. ”

“ If bank currency cannot benefit a nation, through the medium of domestick commerce; because every species of labour consumed at home, will equalise its price in relation to a local currency; and if it cannot destroy or even diminish mercantile profit upon exported labour; it follows, that it does not reimburse a nation for the tax it collects; and at best only raises prices and excites industry, like taxes and useless offices. ”

“ It will be clear to any one who follows the reasoning and explanations in this book, [3] that the only money theory assumed is that common to all theories, and accepted universally; namely, that a large quantity of gold will buy more goods than a small quantity—a pound, than an ounce, for instance—and that an increase of the gold in a dollar will, somehow, increase the dollar's purchasing power. ”

“ The nation must continue to suffer until this is effected. After the currency shall be reduced to the amount which, when the present quantity of the precious metals is distributed among the various nations of the world in proportion to their respective exchangeable values, shall be assigned to the United States, when time shall have regulated the price of labor and of commodities, according to that amount, and when pre-existing arrangements shall have been adjusted, the sufferings from a depreciated, decreasing, and deficient currency will be terminated. ”

“ Our inability to use more than $10 a head. 4. The actual amount of our whole currency, paper and specie, in 1830 (when the Bank of the United States was in all its glory) , and which was only $6 a head. 5. The ease with which the United States can supply itself with its full proportion of the whole quantity if it pleased, and have $16 per head (if it could use it, which it cannot) for every human being in the Union. ”