ard into the gold standard!" But abandon the present gold standard, so called, it certainly does, by converting or rectifying it into conformity with the composite standard.
5. Merely the Weight of the Gold Bullion Dollar
to Be Varied
But how can we rectify the gold standard? That is the question which we set out in this chapter to answer. In brief the answer is: by varying, suitably, the weight of the gold dollar. The gold dollar is now fixed in weight and therefore variable in purchasing power. What we need is a gold dollar fixed in purchasing power and therefore variable in weight.
I do not think that any sane man, whether or not he accepts the theory of money which I accept,[1] will deny that the weight of gold in a dollar has a great deal to do with its purchasing power. More gold will buy more goods. Therefore, more gold than 23.22 grains will, barring counteracting causes, buy more goods than 23.22 grains will buy. Therefore if the dollar, instead of being 23.22 grains, or about one twentieth of an ounce of gold, were an ounce or a pound or a ton of gold, it would, other things equal, surely buy more than it does now, which is the same thing as saying that the price level would be lower than it is now.
A Mexican gold dollar weighs about half as much as ours and therefore has less purchasing power. If Mexico should adopt the same dollar that we have, no one
- ↑ Thus B. M. Anderson, Jr., probably the ablest writer among the few who still dissent from the "quantity theory" in any form, nevertheless approves of the proposal to stabilize the value of a dollar by adjusting its weight.
