TRANSACTIONS OF SECTION F. 747 



use, arranged in quantities corresponding to their relative consumption, so as to 

 give the rise or fall from time to time of the mean of prices ; which will indicate, 

 with all the exactness desirable for commercial purposes, the variations in the value 

 of money, and enable individuals, if they shall think fit, to regulate their pecuniary 

 engagements by reference to this Tahdar Standard.' '^ 



Mr. Poulett Scrope, holding alarmist views as to the appreciation of gold, as 

 shown by the tables of average prices drawn up by the Board of Trade for 1819- 

 1830, cordially approved such a plan ; it was also shadowed forth by G. 11. Porter 

 and Thomas Tooke, the first part of whose ' Histoiy of Prices ' appeared almost simul- 

 taneously with Poulett Scrope's book. The name of Thomas Tooke and his work 

 win always be associated with that of the late Mr. Newmarch, by whom the idea 

 of an index-number was further developed. The late Professor Jevons applied to 

 the same subject his iisual painstaking skill,'- and it has only the other day been 

 brought rmder the notice of so practical a body as the London Institute of Bankers 

 by Professor Marshall,^ in the discussion of a recent paper by Mr. Gifien. An ideal 

 index-number is not inconceivable ; if attained it would give us not only the ratio 

 between commodities so called as among themselves, but also the ratio between 

 commodities generally and the precious metals which serve as the medium of barter 

 between them. But the attempt to arrive at it is attended with infinite difficulty ; 

 the almost innumerable total of commodities is not, even when ascertained, a number 

 of articles to be measured in height by an arithmetical scale, but rather a series of 

 circles, sometimes concentric, at others mutually intersecting to a greater or less 

 degree until the space left to each is a matter of the most elaborate and intricate 

 calculation. To take an apparently very simple instance, if we would attempt to 

 investigate the fall in the price of pig-iron, we may find ourselves involved in the 

 consideration of an antecedent fall in the freight-charges on Spanish haematite ore, 

 no less than in that of a simultaneous fall in wages, consequent on a reduction in 

 cost of food-products consumed by the wage-earners at the iron-works ; or we may 

 have to take into account a decreased demand coincident with the development, of a 

 more economical and safer system of coal-mining. The complexity of the conditions 

 has led French statisticians to regard with very great suspicion the system of index- 

 numbers, if not to reject them as altogether misleading. I cannot myself share 

 this scepticism. Without expressing an opinion on the economic effects that might 

 arise from the establishment of a 'Tabular Standard of Value,' I cannot but 

 think that from a patient investigation of this arduous subject good results may 

 follow, and that to the elaboration of some such common measure as an effective 

 index-number we must ultimately look for the determination of the degree of pro- 

 sperity or otherwise of trade at any given period of time. The valuable paper con- 

 tributed by Mr. Stephen Bourne to this Section at Aberdeen * has served to show 

 what has been done in this direction ; and still more recently Mr. Palgrave '" has 

 constructed index-numbers for England and France, extending from 1865 onwards, 

 in which the relative importance of each commodity included is estimated and a 

 value put on it ; thus meeting the objection of the French economists, that in our 

 index-numbers we do not sufficiently distinguish the importance of each article. 

 I cannot imagine any greater service that this Section could render to economic 

 science than an elaboration of this most valuable adjunct to statistical and economic 

 inquiry. 



I do not venture to avail myself further of the licence as regards time which is 

 accorded to me by custom in addressing you. The address of a Sectional President, 

 unknown, I believe, in the earlier years of the British Association, and of compara- 

 tively modern oi'igin in this Section, has attained in the hands of my predecessors 



* Principles of Political Economy. London : 1833, p. 406. 



- Money and 3Ieclianism. of Exeliange, p. 333 ; Journ. of Stat. Soc, June 1865 ; 

 Letter to Economist, May 8, 1869. 



' Journ. of Instit. of JBanliers, June 1886. 



* Printed iji extenso in Report of British Association, Aberdeen, 1885. 



* Third Report of Royal Commission on Bepression of Trade, &c. (C. 4797), 

 Appendix B., pp. 312-90 : ' Memo, on Currency and Standard of Value in England, 

 France, and India,' by Mr. R. H. Inglis Palgrave. 



