ABSTRACT
The gold standard theory, true to the definition of the term, rests on the principle that a given weight of gold shall always be bought and sold by the Central Bank for a fixed amount of legal tender. The notion of Index-number standard is as yet far from being uniformly understood by its advocates. There is something elusive about it, which baffles students. The gold standard theory was Hot a theory of buying and selling and of price-formation, but a theory of money-changing. Today the waking minds have come to understand that the question of a monetary standard is not one of the ratio between various lands of money, but one of the ratio of money to that which is bought for money and sold for money: goods. The gold standard in its traditional make-up is doomed to go, for it has failed. Mr. J. M. Keynes has found the apt word for it; he calls it "a barbaric relic".
