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FANCY MONETARY STANDARDS 167
seems to me, the two proposals are so far identical.
A promise to pay a varying quantity of bullion, the
promise being regarded as the pound, and a promise
to pay a varying number of sovereigns, which are still
to be called pounds, appear to be much the same things.
Mr. Bagehot's criticism applies alike to both proposals.
If the editor of this" Journal" would adopt the sug-
gestion, it would perhaps be a good thing to reprint'
Mr. Bagehot's article in full, so that students can refer
to it easily.l _
Mr. Bagehot's objections to this multiple standard or
value of bullion standard are four in number, and are
of the most serious kind.
First.-The adoption of such a standard in this
country would endanger our foreign trade. The foreigner
draws bills on London and makes bills payable in Lon-
don, and so business is attracted to us, because both
parties are sure of the medium in which they will pay
or be paid, and that medium is gold. Mr. Williams
would no doubt say that if his standard were generally
adopted, this objection would fail, but clearly, until it
is generally adopted, a country like England, with an
immense foreign trade as well as foreign investments,
cannot have such a standard.
The second objection is that banking would be im-
possible with such a standard. The customers of a
bank, the mass of plain people who have debts to re-
ceive and pay, would not understand the variations in
the amounts of gold paid for the same nominal debt
according to the date at which that debt happened to
be contracted.
The third objection is that it would not be quite so
easy as those who propose such standards seem to
think to settle and define the units of all the different
commodities that were to enter into the" index num-
ber." This statement has been most fully confirmed, I
I This suggestion has been adopted, and Mr. Bagehot's article is
reprinted in the present number. See next article.-Ed#QI' ~I
.. EconDmU Journal.»