Stabilizing the Dollar

The fundamental fact on which the proposal of this book is based is that the purchasing power of the dollar is uncertain and variable, that is, that the price level is unstable. The war has caused the greatest upheaval of prices the world has ever seen. Inseparably connected with this upheaval is grave and world-wide industrial dis content. Because of this and because of the perplexity of business men as to future movement of prices, there has been much discussion going on of the question whether the level of war prices will drop or whether it can be stabilized. To show that permanent stability can be secured is the chief aim of this book and a specific and de tailed plan for this purpose is presented. The first sketch of this plan was published in 1911 in my Purchasing Power of Money. It was later presented before the International Congress of Cham bers of Commerce at Boston, September, 1912, and again before the American Economic Association, December, 1912. The plan was elaborated in the Quarterly Journal of Economics, February, 1913. In October, 1917, I gave the Hitchcock lectures at the University of California, using much of the ma terial published now, for the first time, in this book. In the spring of 1918 a Committee of the American Economic Association, onthe Purchasing Power of vii viii PREFACE Money in relation to the War, indorsed the principle of stabilization and commended the subject to the earnest attention of statesmen and economists. By this time academic economists had been largely won over to the idea, it having run the gantlet of their criticism for several years. The general support of economists marks the first milestone in the progress of the idea. Latterly a beginning has also been made toward arresting the attention of the business and industrial world, the interests of which are most at stake. Their general approval, if obtained, will mark the second milestone. Until recently it has seemed premature to ask men in political life to press for the actual adoption of the plan. Their action, if taken, will mark the third and final milestone. Appendix IV, 3, gives the names and comments of prominent leaders in all three fields economics, business, politics who have approved the idea. When I first propounded the plan for stabilizing the dollar I supposed that I was the first to do so. It soon appeared, however, that the same thought had occurred independently to a number of others. The bibliography in Appendix VI gives references to the published writings in which substantially the very plan here presented has been outlined by others. There are a few anticipators who have never pub lished their views but have kindly sent me copies of manuscripts or letters describing them. The following is a complete list in chronological order of anticipators, so far as known to me John Rooke, 1824 the late Simon Newcomb, astronomer and economist, 1879 PREFACE ix Professor Alfred Marshall, Cambridge, 1887 Aneurin Williams, M. P., 1892Professor J. Allen Smith, now Dean, University of Washington, 1896 D. J. Tinnes, Hunter, North Dakota, 1896 William C. Foster, Boston, Mass., 1909 Professor Harry G. Brown, University of Missouri, 1911 Henry Heaton, Atlantic, Iowa, 1911. This list could be lengthened considerably if the authors of plans radically different, but having the same purpose in view, were to be included. Among these authors is the late Alfred Russel Wallace, the naturalist...