168 



SCIENCE 



[N. S. Vol. XXXVII. No. 944 



Naturally, lower prices for foods result- 

 ing from cheaper transportation and the 

 displacement of farm labor by agricultural 

 machinery resulted in a world-wide rela- 

 tive urban movement. Undoubtedly, sev- 

 eral years of continued high food prices 

 will prove the most efficient cause to en- 

 courage an increased production of foods. 

 All legislation making agricultural credit 

 available and affording opportunities to ac- 

 quire land on favorable mortgage condi- 

 tions will contribute to this end. 



The third intei'national cause is undoubt- 

 edly the increased production of gold^" 

 commencing in the late nineties. Just as 

 excess of paper money in the Civil War 

 period inflated prices, so the excessive gold 

 supplies have inflated international prices, 

 and all credit devices economizing the use 

 of gold have helped to magnify the tend- 

 ency towards inflation. Possibly, the 

 greater advance in food prices of the 

 United States is due to the greater influ- 

 ences of the first two international causes 

 in the United States, and the so-called gold 

 influence may be responsible for the larger 

 part of the common advance. However, 

 the relative importance of the three inter- 

 national causes may not be accurately esti- 

 mated. 



But the facts I'emain that the instability 

 of the international price level is a disturb- 

 ing element and the difficulty is that we 

 measure all commodities in terms of one 

 commodity rather than in the terms of fifty 

 or more important commodities. In 1910, 

 the writer recommended the establishment 

 of an optional multiple standard,^^ pos- 

 sibly by the Bureau of Standards. In re- 

 ferring to this proposal, the Massachusetts 

 Commission on the Cost of Living says : 



"Norton's "Gold Flood," Cosmopolitan Mag- 

 azine, June, 1910. 



"Norton's "The Remedy for the High Prices," 

 Independent, February 10, 1910. 



It is hard to see how any harm could come from 

 giving official aid to the maintenance of such a 

 standard for the use of any borrowers and lenders 

 who chose to adopt it. In the event of a long 

 continuance of the upward movement of prices, its 

 use might prevent serious injustice and great hard- 

 ship. We recommend that our senators and repre- 

 sentatives consider the expediency of advocating 

 its establishment. 



The two classes which suffer most by the 

 instability of the price level are wage earn- 

 ers and investors.^- If wages were payable 

 in the multiple standard, wages would 

 fluctuate with cost of living and strikes 

 would be diminished to a veiy great extent. 

 If long time obligations were expressed in 

 the multiple standard, creditors and 

 debtors would exchange equal amounts of 

 purchasing power. Now, all of these 

 classes — the manufacturers, the labor 

 unions, the bankers and the investors are 

 intelligent. Why not leave the determina- 

 tion of the standard to agreement, and as a 

 first step simply create an optional multiple 

 standard which could be used when speci- 

 fied in wage contracts and in long time ob- 

 ligations. 



The reasonable basis of an optional mul- 

 tiple standard would win its way and the 

 economic benefits experienced would coun- 

 sel its extension. By proper organization 

 of clearing houses under a national clear- 

 ing house," by regulation of storage-ware- 

 house warrants and the clearances of all 

 classes of stock and produce exchanges, all 

 transactions could be made either by the 

 present currency made token money under 

 a multiple standard, or by clearances direct 

 in the optional multiple standard, since 

 the holder of one unit of the optional 

 multiple standard could convert into the 

 value of any other commodity, if all prices 



^- Norton 's ' ' Stocks as an Investment when 

 Prices are Rising," Securities Sevietv, September, 

 1912. 



" Norton 's ' ' Central Bank as a Federal Clear- 

 ing House," Moody's Magazine, September, 1910. 



