CHAPTER XIV 
THE STANDARD OF VALUE 
(Note: In this chapter there is presented the substance of an address delivered 
by the author in February, 1920, before the Commonwealth Club of California. 
He was at that time President of the Club.) 
During the world war and the years immediately following, 
it was brought home to millions of people in this country and 
abroad, that there is something radically wrong with the function- 
ing of the generally approved and accepted monetary systems 
of all civilized countries. The rapid decline of the purchasing 
power of the money unit, whether the same is called pound, 
dollar, franc, lire, mark, ruble or yen, has been one of the immedi- 
ate results of the world war. This has set the masses to wonder- 
ing and to thinking. They are astounded at the sudden very 
considerable shrinkage in the value of long-time credits and the 
country’s best thought is directed toward finding a remedy. 
Credits in the sense in which here used should be considered to 
mean the right to obtain a specified, definite sum of money at 
some future time. There has been shrinkage of the real value, 
not only of the bond which was bought before the war, its value 
being measured by the desirable things which the money which 
it commands will buy, but also, in every wage and salary which 
was not increased in full correspondence with the increase in the 
cost of living. When employment is accepted at an agreed wage 
or salary it is ordinarily understood that the wage or salary will 
continue either for a fixed term or for an indefinite time in the 
future. In either case time is an element which enters into the 
transaction, and whenever any considerable length of time must 
elapse before the transaction is complete the parties thereto are, 
in a sense, speculating. They stand to gain or lose in direct 
proportion to the change in the purchasing power of the dollar 
(the dollar representing any money unit) during the time in- 
volved in the transaction. 
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