to chance. The Government also standardizes every important unit other than the dollar.
Furthermore, the Constitution of the United States in Section 8 expressly authorizes Congress "to coin money, regulate the value thereof,—and fix the standard of weights and measures,"
While, when the Constitution was adopted, there could have been no thought of employing an index number for regulating the value of money any more than there was thought of using aeroplanes for carrying the mails, there was thought of stabilizing the purchasing power of money. In fact it was the instability of the Colonial and " Continental " paper money which was doubtless largely responsible for this clause and for the clause forbidding the individual states from coining or issuing money.
Therefore, not only should we not complain of the plan as giving new functions to the Government but we may complain that this ancient Constitutional function has not been performed as it should be to keep pace with modern methods of measuring the value of money.
We may go further and say that some Governments have not only been negatively guilty (of neglect to provide a stable yardstick of commerce) but positively guilty (of disturbing the monetary standard).
In our own Colonial, Revolutionary, and Civil War history our American Colonies and national Government depreciated their monetary standards. In the Great War every belligerent country did so and incidentally ruined the monetary standards of neutral countries. It should be added, however, that our own Government officials, from the President down, strove to avoid inflation and succeeded more nearly than did the officials of any other belligerent country—a fact in which we may take some pride.[1]
- ↑ As shown elsewhere American inflation was chiefly gold inflation before we entered the war, and our war inflation, such as occurred, was largely credit inflation of private persons borrowing of banks.
