886 PROCEEDINGS OF SECTION G. 
proceeds of its production give to the classes in the community 
whose employments consist in services, incomes equivalent to the 
wages and profits of those engaged in the work of production. 
Professor Sidgwick has emphasised the consideration which is 
to be given to the work of services not engaged in the work of 
production, in an inquiry respecting production, distribution, and 
wealth. 
No theory has so far, however, been enunciated which would 
establish definite data as to the measure of wealth generally of a 
specific production, or of production under different conditions, or 
which could be designated as a law of distribution. 
The question is solved by ascertaining in any country the ratio 
of expenditure out of aggregate earnings for material products at 
their original value, at the point of production. Anything paid 
in excess for the product represents services such as those of 
transportation or distribution. In the paper referred to, I pointed 
out that the money proceeds of production expended in the 
country, which necessarily represent the product, give incomes or 
earnings, in circulation through different hands, without the 
consumption of the amount of product the currency represents ; 
and according to a hypothesis I then presented, that the aggregate 
of the secondary incomes received was governed by the law of a 
geometrical progression. The operation can be stated as one 
which must have universal application, according to the ratio 
which is ascertained. My deduction from the statistical informa- 
tion then available, was that the ratio of such expenditure in the 
aggregate, was one-half-—that is to say, that taking all classes in 
the community, those in receipt of the highest and the lowest 
incomes, there would be thac definite ratio. 
But the establishment of the theory or working hypothesis I 
have in mind, would not depend upon the question whether the 
statistical data or my deduction of the ratio were correct ; because 
if it should appear that for any particular country the ratio were 
not 50 per cent., or a sufficiently ¢lose approximation thereto, to 
be so stated, the ratio of expenditure, whatever it might be, would 
nevertheless be attended with results of a corresponding character. 
I am indebted to Professor Gurney of the Sydney University for 
the form of the calculation which would give the result of any 
progression based upon my hypothesis, from which I have been 
able to frame the following formula which such calculation 
indicates. 
V (value of production) ; 
R (ratio of expenditure) ~~ I (total incomes). 
To show the operation of the law, I give results varying from 
the ratio of one half, thus— 
The total production being 100. 
ie 
‘oor, 
