182 BEFOBT— 1888. 



substituted on a large scale, viz., the tithe averages, these being made ta 

 vary with the value of grain, so that in effect the tithe is so much grain, 

 and not so much money. The Scotch Fiars prices have existed for more 

 than two centuries for similar purposes. 



2. To enable comparisons to be made between the value of money 

 incomes in different places, which is often an object of great practical 

 interest, not only individuals contemplating residential changes having to 

 consider it, but Governments and other large spending bodies, spending 

 money in widely distant places, having to do the like. Apart from di- 

 rectly business issues of this sort, such questions are of obvious practical 

 interest to economic students, and through them to the general public. 



3. To enable historians and other students making comparisons 

 between past and pi'esent to give an approximate meaning to the money 

 expressions which they deal with, and say roughly what a given fine,^ 

 or payment, or amount of national revenue or expenditure in a past age 

 would mean in modern language. To the student of history from the 

 economic point of view some such method of giving a meaning to 

 money expressions is indispensable. 



And it has been seen theoretically that the only way to accomplish 

 these objects is to form ' index-numbers,' that is, to substitute for money 

 some other measure by which the value of money or any other single com- 

 modity relative to an aggregate of commodities may be ascertained. If 

 all commodities could be included in such an index-number, and a proper 

 weight assigned to each, and if the same commodities existed in the same 

 proportion in past times and at different places as exist now at a given 

 place, the new measure would be perfect for the purposes required, pro- 

 vided that there were any possihility of ascertaining the prices themselves, and 

 approximately, apart from this special difficulty of obtaining prices, there 

 may be such a new measure which will be useful, though it is not ideally 

 perfect. For the purposes above stated, it is obvious something that is 

 very useful may be obtained without even an approach to ideal perfection. 

 The intervals of time and the differences of place may be so great that 

 useful distinctions may be drawn out, even although there is a wide 

 margin of error, and although it is certain that from such causes as the 

 introduction of new commodities and the dropping out of others, and the 

 continual changes in the proportions in use of all the others, absolutely 

 exact comparisons cannot be made. 



But, apart from all such difiBculties, which were fully discussed in last 

 report, it may be stated broadly that hitherto both students and practical 

 politicians have been limited even more effectually in their means of 

 measuring variations in the monetary standard by the absolute deficiency 

 of the data. It is practically, for instance, unnecessary for tbem to 

 consider whether they are to use the retail prices which must be used if 

 an ideal index-number based on desiderata is to be employed, because 

 there is no complete record of retail prices even at the present time, and 

 certainly there are no such records of retail prices in many different 

 places, and going back over historical periods. Similarly there can be 

 no question, as regards the past or present, of such an ideal standard as 

 that suggested by Professor Nicholson, which depends on a valuation of 

 the property in a country, for no valuation approximately accurate 

 enough for such, a purpose could be made in any country at the present 

 time, much, less could it be carried backwards for any lengthened period. 



For these reasons nracticallv the best must be made of wholesale 



