CH. I

THE CLASSIFICATION OF MONEY

21

namely a Representative Money managed so as toconform to an objective standard.

The real subjects of the controversy were two.First, was it expedient to change the standard ofsterling at such a time or in such a way that thetransition would involve a significant alteration inthe level of money-incomes ? Should not any changeof standard be so made that the purchasing power ofthe new standard is, at the moment of transition, bothequal to the purchasing power of the existing money-of-account and in equilibrium with money-incomes,with the result that the change of standard, in itselfand at the moment, does not involve any alteration, upor down, in the current level of money-values ? Theopposition, more impressed than the official partywith the objections to a deliberate lowering of money-values, maintained that it was inexpedient to alter thestandard in conditions which would necessitate such alowering. But the official party attached great im-portance to the precise number of Troy ounces of goldwhich was to answer to the money-of-account. Theywere willing neither to adapt the number of ounces tothe existing purchasing power of the money-of-accountnor to wait until the purchasing power of the money-of-account was adapted to the desired number of ounces,but preferred, for a variety of reasons, to run the riskswhich must attend any forced or sudden disequilibriumin the existing levels of incomes and prices.

This bone of contention was quite distinct from thefurther subject of controversy concerning the choiceof the Standard itself, namely whether or not gold wasthe most suitable obj ective standard. Those who cameto be known as the Monetary Reformers were not lessanxious than others to bring to an end the period ofFiat Money ; indeed they laid more stress than theiropponents on the importance of a stable objectivestandard. But they argued that gold possesses now,even less than formerly, the qualities of a satis-