the yardstick, the bushel basket, the hour of work, etc.—should vary concertedly to the same extent.
We tolerate our erratic dollar only because the havoc it plays is attributed to other agencies. If its victims knew the truth about the dollar, it would be stabilized at the very next session of Congress.
We tenaciously cling to the blissful assumption that our dollar never varies. We seem to like not only, as Barnum said, to be humbugged, but even to humbug ourselves.
3. An Imaginary Goods-Dollar
A true standard of value (general purchasing power over commodities) such as we would like our monetary standard to be should not be dependent on one commodity merely, whether that commodity be gold or silver or wheat or any other single sort of goods.
Two commodities would be better than one, just as two tipsy men walk more steadily arm in arm than separately. Whenever they tend to lurch in opposite directions they neutralize each other. This is the argument which used to be urged for bimetallism, symmetallism, and other plans for uniting gold and silver. And the argument applies whenever gold and silver move in opposite directions, as from 1873 to 1896. If, for instance, a generation ago, we had adopted a dollar of an alloy[1] consisting of half of the former gold dollar and half of the former silver dollar, our price level would not have suffered the rapid fall it did prior
- ↑ A bill for this purpose was actually proposed in 1879 by Congressman Stephens (Hepburn, History of Currency in the United States, p. 288).
