197 



IRVING FISHER'S PROPOSALS FOR STABILISING THE 

 VALUE OF MONEY. 



By Mabel Palmer, M.A., 

 Durban Technical College. 



Read July 13, 1921. 



A bstract. 



The subject matter of this paper may be summarised as 

 follows : — 



The Evils of a Fluctuating Standard. 



(a) Those due to rising prices. 



Debtors gain at the expense of creditors and hence Here 

 is discouragement of saving. Primary producers, mer- 

 chants and manufacturers gain; hence accusations of pro- 

 fiteering occur. Wage-earners and the salaried classes 

 lose; hence discontent and labour troubles arise. All 

 those working under contract or relatively fixed payments 

 lose, for example, railway and tramway administrations 

 and local authorities, hence there is a slackening in the 

 rate of public improvements. 



(b) Those due to falling prices. 



Creditors gain at the expense of debtors, as shown in 

 the case of war debts. 



Profits fall and enterprise is discouraged, hence bad trade 

 and unemployment ensue. Farmers and other primary 

 producers lose, while wage-earners gain. 



(c) Attempts to fix a minimum wage under a fluctuating currency 



are futile. 



(d) If a paper standard replaces ■ gold, the rate of inflation in 

 different countries varies, and the violent fl net nations of the 

 foreign exchanges add another uncertainty to the trader's 

 difficulties. 



Causes of the Fluctuations. 



Recent violent variations in price have been due to the sub- 

 stitution of paper money for gold, and prices have varied to an 

 astonishing extent in proportion to the volume of paper money 

 issued. Hence many eminent economists advocate a speedy return 

 to the gold standard. This will mean a rapid fall of prices, with 

 all the disadvantages noted previously. 



Disadvantages of the Crude Gold Standard. 



Gold is not a perfect standard. Its rate of production and 

 therefore (to a much smaller extent) the amount in circulation 



