626 REPORT—1883. 
and especially to the papers of Mr. Giffen and Mr. Goschen on the fall of prices, 
it was pointed out that the index-numbers hitherto compiled were liable to criticism 
as failing to comply with the conditions that (1) they should start on a fair average 
of prices; (2) that they should include every class of goods, and also of services 
rendered, rent, &c., which make up the total of our expenditure; (8) that no 
article should be scheduled twice in different stages of manufacture; and that 
(4)-each article should be rated at a figure proportionate to its-consumption, As 
to the production and consumption of gold, statistics on these points were of all 
others uncertain and subject to correction, but it appeared tolerably certain that, 
the gold circulation per head in the United Kingdom was larger in 1883 than in 
1844, while credit in the shape of bank-balances was enormously larger; in all 
probability both the public and the banks were in a stronger position now to meet 
any call on their resources. A true index-number, could it be ascertained, would 
probably show that the apparent large decrease in prices was subject to considerable 
modification, and the rise in the value of Consols and other first-rate securities, 
which Mr. Goschen had shown to be unaffected by any reduction or augmentation 
of prices, was probably in a great measure due to the increased wealth of the 
country, which enabled capitalists to take a lower rate of interest for their money, 
without curtailing their income. Granting the fall in price of many commodities,. 
and assuming the quality to have remained unchanged, on the other hand rents, 
rates, &c., had notoriously risen, so had salaries and wages of all kinds, and the 
amount payable, in one way or another, for ‘ services rendered ’ entered very largely 
into the sum-total of our expenditure. The recipients of these higher wages had 
probably enforced a higher standard of minimum comfort, and were living in 
better houses, with better drainage, water supply, &c. The compensation for this 
must be sought in the more efficient returns in labour for wages received, a more 
numerous and more thriving population, and greater wealth to the community 
generally. In the words of Mr. Giffen, the only outlet from the. situation was the 
gradual adjustment of prices which must arise from increasing wealth of popu- 
lation of gold-using countries. 
4, Method of Measuring Changes in the Value of Gold. 
By J. L. SHADWELL. 
The common method of measuring changes in the value of money by the prices 
of commodities is an unsatisfactory one. Instead of being concentrated on the 
causes which are peculiar to the precious metals, the attention is distracted by the 
multiplicity of the causes affecting the value of every commodity. Adam Smith’s 
proposal to make labour the measure of value, which has been ignored by later 
writers, really affords a solution of the problem. Labour, not being a commodity, 
has no value of its own; but it enables us to measure the value of commodities, 
since’ people will give more or less labour to procure an article, according as they 
think it more or less worth having. 
A comparison of the rates of agricultural wages in the different counties of 
England in 1850 and 1882, shows that they have risen on the average about fifty 
per cent. This is equivalent to a fall of thirty-three per cent. in the value of gold; 
for three ounces of gold will only induce people to perform the same amount of 
labour as two ounces formerly would. ‘The risé of prices during the same period 
has been insignificant ; but this does not prove that gold has not fallen in value, 
but simply that other things have fallen also. As the constant tendency of 
industry is to’ reduce the cost of every product, it is not surprising that a fall of 
thirty-three per cent. in the value of gold in the course of thirty years should be 
unaccompanied by any marked rise in prices. Indeed, if a general rise of prices is 
insisted upon as the only satisfactory proof of a depreciation of gold, the fact of 
depreciation will never be established. 
5. The Scottish Poor Law, past and present, tried by results. 
By EH. A. Macxyiant. 
