The word stabilization now so much used in political parlance, seems to mean in the Unitas Plan the act of rigging the market on the currencies of the member nations. Why cannot foreign exchange be natural? Why should not nations benefit from good fiscal policies and suffer from bad ones, the same as private corporations?

The endeavor to fix exchange rates springs from the fallacious belief that trading through depreciated currencies is unfair. This fallacy holds that when a currency becomes discreditable, the holder thereof has a trading advantage over those who hold currencies that are more creditable, and that therefore nations undertake to depreciate their currencies.

Now no nation but one ever deliberately undertook the depreciation of its own currency, and that one happens to be the one of which you are fiscal officer. It failed to accomplish its purpose, because it had not dawned upon our statesmen that the dollar is the criterion of all currencies, and that a criterion cannot depreciate in terms of itself. All nations that have depreciated their currencies have done so in terms of dollars, and in each case they merely recognized a fait accompli forced upon them by the natural operation of supply and demand. In other words, they acknowledged a fact beyond their control and reduced the "gold content" (dollar content) of their unit.

What is gold dissociated from the dollar? Is it not an inert metal that, because of artificial pricing, has been produced in excessive supply, and if the dollar were withdrawn from it today, would it not plummet in price? By marriage, gold was lifted to a parity with the dollar, but as the dollar sinks to the level of the actual value of gold, gold will divorce the dollar on grounds of non-support. You will recall how in 1934 the President raised the price of gold and expected all prices to rise in salute, but they remained sitting. This time as the dollar falls, gold, like all other commodities, will remain standing.

In other words, gold is a value of and by itself, and the dollar is an entity of and by itself. The dollar will continue to be the monetary criterion of the world, but in the end it will probably follow all other national units to extinction through inflation.

It does not require a convention of nations to make a unit the world standard; it is in the nature of the credit concept that all monetary instruments are and must be weighed in the scale with the best. Since the pound surrendered its premiership, there has been nothing but a dollar standard throughout the world, and gold has nothing whatever to do with it. That the dollar can lift the price of gold above its actual value is merely a demonstration of the dollar's power. But the time is coming when it will no longer be able to do so. Since the United States is the only nation that supports gold, we will then have an end of the gold standard nonsense.