April 17, 1890] 



NATURE 



555 



may just possibly be 20 per cent. Then we should 

 ascribe half this degree of inaccuracy to the figure 1175, 

 which, according to Mr. Giffen's computation, is the ratio 

 of the total capital in 1885 to the total capital in 1875. It 

 would be conceivable that the real increase, as measured 

 by some superior being, is not 17^ per cent., but as little 

 as 7, or as much as 27, per cent. Perhaps the defect is 

 a little more likely than the excess, if there exist any 

 ■constant cause making for depression such as the in- 

 creased stringency of the tax-collectors in later years. 



The growth of 17 percent, in the decade under con- 

 sideration may appear surprisingly small compared with 

 the 40 per cent, recorded for the preceding decade. The 

 general accuracy of the contrast is, however, confirmed 

 by a comparison of the growths in each item for the two 

 decades. Mr. Giffen points out that in the former decade, 

 unlike the latter, there are no growths downwards. Also 

 the percentages which measure increase run mostly at a 

 higher level for the earlier period. His detailed examina- 

 tion of the figures leaves nothing to desire. For a sum- 

 mary contrast between the two sets of percentages we 

 might submit that a proper course would be to compare 

 the medians of the respective sets of figures (the arith- 

 metic means would not be suitable owing to the very 

 •unequal importance of the figures relating to such miscel- 

 laneous items). Operating in the manner suggested, we 

 find as the median of the first set of percentage growths 

 50, and of the second 25, thus confirming Mr. Giffen's 

 conclusion that the former movement is about double the 

 latter. 



The conclusion that in the last decade our progress has 



been only half what it was in the preceding decade is at 



first sight disappointing. But we must remember that as 



yet we have accomplished only part of our calculation. 



We have still to make a correction for the change in the 



value of money which may have occurred between the 



two periods. This is a problem familiar to Mr. Giffen. 



In his classical computations of the changes in the volume 



of our foreign trade he encountered and surmounted a 



similar difficulty. In that case he ascertained the change 



in the level of prices at which exports and imports ranged 



in different years without going beyond the statistics of 



foreign trade, and by operating solely on the prices and 



quantities of exports and imports. It might be expected^ 



perhaps, that he would pursue an analogous course in 



constructing a measure for the change of prices affecting 



the volume of capital. He would thus have been led to 



adopt the very ingenious method of measuring changes 



in the value of money which has been proposed by Prof. 



J. S. Nicholson. But, however cognate that original idea 



may be to the theory of the subject, it will be found in 



practice not easy to apply to the present computation. 



At any rate, Mr. Giffen has taken his coefficients for the 



correction in question, not, as before, from the subject 



itself, but ab extra, from Mr. Sauerbeck, Mr, Soetbeer, 



and the Economist. Averaging their results, he finds that 



money has appreciated to the extent of 17 per cent. 



•during the interval under consideration. This correction 



being made, the growth of capital in the period 1875-85 



proves to be about the same as the growth in 1865-75. 



The soundness of this conclusion is confirmed by some 

 reflections which at first sight might appear open to 

 criticism. After using the fall of prices tQ prove the 



increase of capital, Mr. Giffen turns round and seems 

 to reason from the increase of capital to the fall of 

 prices. 



*' If two periods are compared in which the increase 

 of population is known to be at much the same rate 

 throughout, and the increase of productive capacity may 

 be assumed to be at the same rate, or not less, in one of 

 the periods than in the other, then, if the apparent accu- 

 mulation of capital in the one period proved to be less 

 than in the other, it must be ascribed to some change in 

 the money values." 



This reasoning may appear circular to the formal logi- 

 cian. But, in the logic of induction, we submit that it is 

 very proper for two arguments archwise to support each 

 other. The consilience of different lines of proof is 

 indeed an essential feature of the logic of fact, as formu- 

 lated by J. S. Mill. We venture to interpret Mr. Giffen's 

 double line of proof by the following parable. Has it 

 never occurred to you, reader, on looking at your watch, 

 and finding the hour earlier than you expected, to suspect 

 that the instrument has played you false? You review 

 what you have been doing ; recollect, perhaps, that you 

 began work or got up earlier than usual ; and, on reflec- 

 tion, see no reason to distrust your watch. You test the 

 watch by the time, and you measure the time by the 

 watch. Similarly, Mr. Giffen is quite consistent when 

 he measures the extent of the growth of capital by the 

 extent of the fall in prices : and confirms the fact of a 

 fall in prices by the independently inferred fact of a 

 considerable growth of capital. 



In connection with the fall of prices we should notice 

 an important contribution which Mr. Giffen makes to 

 monetary science by defining the ambiguous term "appre- 

 ciation." The readers of Nature who may be more 

 familiar with physical than social science will smile when 

 they understand that there has been in economical circles 

 a stiff controversy on the following question : Whether, 

 if there is not now in circulation a sufficient amount of 

 money — in proportion to the quantity of commodities 

 circulated — to keep up prices to a former level, the cause 

 of the fall is the scarcity of gold or the abundance of 

 goods. It is as if, when the shoe pinched, people should 

 dispute whether the shoe is too small, or the boot too 

 large. The mirth of the physicist seems for the most 

 part justified. However, as Coleridge or somebody said, 

 before we can be certain that a controversy is altogether 

 about words, there is needed a considerable knowledge of 

 things. The better class of controversialists in the matter 

 before us have doubtless had a meaning, but a latent 

 and undeveloped one, which it required our author, 

 like another Socrates, to bring to birth. The issue 

 appears unmeaning, as long as you consider the question 

 in Mr. Giffen's phrase " statically," without reference to 

 the rate at which the quantity of goods and gold are 

 growing. But " dynamically," if goods and gold cease to 

 move abreast, it is intelligible to attribute the separation 

 between the two to the operation of one rather than the 

 other. As we understand the matter, using our own 

 illustration, let us liken the constant growth of goods to 

 the uniform velocity of a boat carried onward by a steady 

 stream ; and the parallel increase of money to the move- 

 ment of a pedestrian on the bank. If the pedestrian, 

 after keeping abreast with the boat for some time, is at 



