ABSTRACT
The term "commodity dollar" in the sense in which it is usually employed to-day is comparatively new, although the general idea which it connotes has been suggested from time to time over a period covering more than a hundred years. To meet this difficulty the commodity dollar plan provides that the weight of the dollar shall be changed from time to time with the object of making the dollar always buy approximately the same quantity of goods; in other words, of giving it fixed value or purchasing power. An objection that has been frequently urged is that, at times when the commodity price level was tending strongly upward or downward, the plan would give rise to heavy speculation in bullion dollar that would render impossible the price adjustments sought. Here is an excellent illustration of the difficulty of controlling commodity prices merely by the mechanics of increasing the volume of money in circulation and the volume of reserve bank credit.
