29

H.—44.

been adopted. This summary is as follows : Parcel-post ; farm loan facilities ; workmen's compensation ; other forms of social insurance ; Government ownership of public utilities ; socialism of every variety ; reduction of human disease and disability ; prohibition ; the "simple life," including abandonment eif social obligations and " emigration " to a, different part of town ; housekeepers' mark(!t clubs ; municipal slaughterhouses ; State bakeries anel butcher-shops ; tram freight service ; co-operative selling by farmers; utilization of empty city lots; municipal markets; scientific management; reduction of middlemen ; co-operation ; profit-sharing ; publicity as to prices and profits ; the single, tax ; better supervision of weights and measures ; use of bulk goods instead of paokage goods ; use of " e;ash and carry " system instead of '" telephone anel deliver " ; repeal of taxes em consumption ; reduction of railway rates namely, on vegetables, fruit, and fresh fish ; a tax on export commodities (the idea being that the tax will keep the local price leiwer than the export price by the; amount of the tax) ; municipal selling eif potatoe's, fish, &c., at cost ; laws against speculation and monopoly; price-fixing; regulation of cold-storage plants; granting of subsidies to cold-storage plants ; trade-unionism ; the destruction of trade-unions ; inflation ; elastic currency ; bimeta lism ; sliding scale of wage;s based em cost of living ; disarmament. In discussing theesee so-called remedies which have either been proposed or adopted in places Professo-T Fisher states that most of them are excellent in themselves but are irrelevant to the. problem under consideration—that is, they would not tend in the least to stabilize the price-level and the, purchasing-power of money. They might help the people to endure the high post eif living, but would, not reduce or prevent it. Some of the, proposals may be important to the sum of human happiness, but they are quoted by Professor Fisher with a view to showing in what direction people, tend to think when the; problem of the high cost eif living is mentioned. The fact that such proposals are mostly concerned with economy anel efficiency in the production, distribution, and consumption of goeieis shows that little; thought is ordinarily given to the other side' eif the marketthat is, to the monetary aspeot eif the question. The trouble with most of the Temedies suggested above is that they deal with the 1 volume; of trade and leave uncontrolled and unchecked the means of exchange : in other words, as long as no effort is made to adjust the volume of the medium of exchange to the amount of business that has to be done, it is impossible to control the general prioe-level, or prevent fluctuations in the purchasingpower of the sovereign, or solve the cost-of-living problem. That control of the general price-level by standardization of the, purchasing-power of the monetary unit of value, the sovereign, is the way out of the economic labyrinth has bee;n suggested by many economists-- notably President Woeidrow Wilson, Alfred Marshall, Simon Newcomb, Alfred Russell Wallace, A. C. Pigou, and other write s ; and this solution is being advocated by Professor Trving Fisher with a brilliancy of statement and wealth of statistical reasoning that has attracted world-wide recognition. The' plan proposed by Professor Irving Fisher is briefly as follows : (1.) Tei refrain from putting gold coins again into circulation, and to substitute gold certificates entitling the holder on any date to sovereigns of gold bullion of such weight as may be officially declared to constitute a sovereign for that date. (2.) To retain free, coinage;—that is, to be more exact, the' unrestricted deposit of gold and the, unrestricted redemption of certificates. (3.) To designate an ideal composite or " goods-sovereign," consisting of a representative assortment of commodities worth at the. outset a gold sovereign of the present weight, and to establish an index number for recording at stated times the' market price of this ideal " goods-sovereign " in terms of the gold-bullion sovereign. (4.) To adjust the weight eif the sovereign (that is, the actual bulliem sovereign) at stated intervals, each adjustment to be proportionate' to the' recorded deviation of the index number from par. (5.) To impose; a small " brassage " fee, anel provide that no one change in the bullion sovereign weight shall exceed that fe-e'. The; crux of the plan lies in the provision for adjusting the weight of the; gold-bullion sovereign. Its significance, is that to keep the! sovereign- the, unit measure of value —from shrinking in value it should be made! to grow in weight, thus recognizing that a depreciated sovereign is a short-weight sovereign ; and, reversely, to keep the sovereign from growing in value it should be made to shrink in weight, thus recognizing that an appreciated sovereign is an overweight sovereign : in other words, to keep the price-level of things in general from rising or falling, to make the price of gold fall or rise. The plan assumes, of course, that a sound banking system is retained or created, as without such a system the, effect of tin' stabilization plan would lie' epiite lost. The plan depends absolutely for its workability upon the possibility of computing a reasonably accurate index number measuring the rise and fall in the general level eif prices eir changes in the cost eif living, or changes in the purchasingpower of the unit of value. This task is not beyonel the', skill eif our Statistician's Department. In fact, as far as it goes, the index numbers published by the Government Statistician are, in the Board's opinion, based upon more satisfactory data than any which have be'em obtained in similar investigations in other parts of the' world with the' exception of Australia, which follows the same method of computation. So hopeful eloe;s Professor Irving Fisher's suggested remedy appear to the Board that we; earnestly recommend it to the serious attention of the Government. W. G. MoDonaed, ") .1. R. Hart, of the Board, P. Hally, J J. W. Collins, Secretary. 31st July, 1919.