77 o THE POPULAR SCIENCE MONTHLY. 



(communicated to the Statistical Society of London and published in 

 the journal of their "Proceedings " for September, 188G, and March, 

 1887), has arrived at the following conclusions : There was a persist- 

 ent decline in the average prices of general commodities in England 

 from the beginning to the middle of the present century ; or, more ex- 

 actly, to 1849. From thence there was an advance, which culminated 

 in 1873. But leaving out of consideration a remarkable speculative 

 period from 1870 to 1874, coincident with the Franco-German War 

 and the payment of the war indemnity by France, during which pe- 

 riod prices rose with great rapidity from 1870 to 1873, and fell in the 

 succeeding year (1874) below their average starting-point in 1870, 

 the decline of prices may be regarded as having been continuous from 

 1864 to 1886. Compared with the average prices of general commod- 

 ities from 1867-77, the period from 1878-'85 shows a depreciation 

 of 18 per cent. But if the average prices of 1885 alone be taken, 

 tbe decline from the average for lS67-'77 is 28 per cent ; or continuing 

 the comparison through 1886 and embracing a somewhat larger num- 

 ber of articles, the average depreciation, in the opinion of Mr. Sauer- 

 beck, has amounted to 31 per cent. Furthermore, the average level 

 of prices for 1886, according to the tables of Mr. Sauerbeck, was 

 considerably below the average for the year 1848, which in turn ap- 

 pears to have been the lowest previous point for the century subse- 

 quent to 1820. 



Many similar inquiries, embracing in some instances a much larger 

 number of articles than were selected by Mr. Sauerbeck, have been 

 instituted in recent years by other investigators in England, France, 

 Germany, and the United States ; but the conclusions arrived at are 

 respectively so divergent that no figure representing the average de- 

 cline during the period under investigation would probably be univer- 

 sally accepted as in every way satisfactory and conclusive.* 



The usual method employed by European economists in order to 

 form a correct idea of the changes of prices in one period as compared 

 with another, is to take the prices of certain selected commodities in 

 a given year, or the average prices of a series of years, as the stand- 

 ard ; represent this by the figure 100 or 1,000, and then note the 

 increase or decrease in price in the case of each article in each sub- 

 sequent year in proportion to this standard. Combining the per- 

 centage of price alterations among all the articles, a total of the 

 variations experienced becomes known, and the number thus obtained 

 is termed an index number for the year, or other period under con- 

 sideration ; or a number expressive of the ratio of price at a given 

 date to the average of some former period. Thus, for example, if the 

 average prices of forty articles in the year 1880 were to be taken at 



* The so-called " Hamburg " tables published by the well-known German statistician, 

 Dr. Soetbeer, in 1886, make the average of prices in 1885 10 percent higher than they 

 were in 1847-50. 



