The Future American Dollar. - William Stanley Jevons, Money and the Mechanism of Exchange [1875]
Edition used:
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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The Future American Dollar.
The most easy and important step which can now be taken towards an international money, consists in the assimilation of the American dollar to the five-franc piece. A great opportunity arises from the fact that the currency of the United States is now a variable paper currency. Considering the enormous fluctuations of value which have been experienced in the last ten years, it would be altogether needless scrupulosity to bring it back to the old standard, to the last degree of exactness. Every change of value of the currency, whether it be a fall or a rise, is so far injurious. Now the American dollar consists of 25.8 grains of gold, valued in English money at 49.316 pence. When gold is at 111 the paper dollar will be at a discount of 10 per cent., and will therefore be worth 44.384 pence, whereas the French dollar, or five-franc gold piece, weighs 24.89 grains, and is worth 47.58 pence. It would be obviously desirable, therefore, to make the new metallic dollar exactly of the same weight as the French one, and to commence specie payments when the greenback currency shall have risen to par with this coin. As regards all contracts made in paper, all current prices and charges, this change would involve no breach of faith whatever; it would in fact imply less change and breach of contracts than if the paper currency were reduced sufficiently to come to par with the old dollar.
The reduction of weight of the dollar would indeed lead to a repudiation of all gold contracts, including all bonds of the United States, railway companies, and other bodies payable in coin, unless provision were made to alter the terms of such contracts. This difficulty, however, could be overcome by simply enacting that each 103½ of the new dollars shall be received and paid as equivalent to 100 of the old ones.
There is little doubt that the adhesion of the American government to the proposals of the Congress of 1863 would give the holding turn to the metric system of weights, measures, and moneys. It is quite likely that it might render the dollar the future universal unit. The fact that the dollar is already the monetary unit of many parts of the world, gives it large odds. In becoming assimilated to the French écu, American gold would be capable of circulation in Europe, or wherever the French napoleon has hitherto been accepted. It may seem unpatriotic in an Englishman to advocate a change which may lead to the defeat of the pound sterling, but I look upon any one scheme of unification as better than none. Whatever may be the ultimate results, I desire to see assimilation between the French and American systems adopted as soon as possible. For reasons subsequently stated, I consider the dollar so good a unit that it would be mere national prejudice to oppose it, were there a fair chance of its general adoption. Even if it were not generally adopted, it would be a great step in advance if Great Britain, America, and France were to agree to coin gold money identical in weight and fineness, which might circulate indifferently as sovereigns, five-dollar pieces, and twenty-five franc pieces.
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