Wherever gold found shelter, if demand were exercised, it would not be with the simpler folk who hold scattered title to it.
No new wealth is miraculously created: what is proposed is simply to uncover basic national value and measure it by a scientific unit, thus destroying the swaying shadows which still dominate and terrify us.
Leaving detail for the sake of a larger view, the change in our basis of measurement, from gold to census-area, would eliminate a very dangerously contracted passageway in our arteries of flow. This passageway is permitted to remain contracted because we blindly support a chaotic device for arbitrary measurement which has no better justification than a tradition of autocratic bad-faith. Our economic logic is distorted by an ancient injury.
As matters stand at present, it is as though having originally suffered our stream of human energy to be wrongfully diverted into a small inadequate reservoir controlled by a favored few, we still persist in using this, in a childish attempt to measure flow, long after we have swept away all other arbitraries, and constructed, upon the bed-rock of individual rights, a magnificent dam fully capable of conserving the whole stream of human energy and merging all the branching and various manifestations of personal effort. To utilize, for measuring and facilitating the flow of national effort, such a device as the gold standard—a device which is inadequate, unscientific, untrustworthy and out of our control—is unspeakable economic engineering, no matter how amply supported by tradition. Any period of great demand overtaxes this archaic reservoir, and the whole machinery of production slows down, or finally stops, as in our depressions or panics. Demand, in terms of human effort, is unimpaired, but demand, in terms of gold, is checked. The only thing that prevented the same consequence from being cleanly defined in the year 1921 was our Federal Reserve System,[1] a political device created to miti-
- ↑ The liabilities for 1921, $755,777,685, exceeding by 77 per cent the hitherto record total, $426,371,516, set up in 1920, were over double the aggregate, $357,000,000, of 1914, and nearly double the totals, $383,700,000
