ON VARIATIONS IN THE VALUE OF THE MONETARY STANDARD. 187 



column. These articles are either finished products (things ready for 

 consumption, like cheese and milk) or represent such things by entering 

 into their production, as coal (used in manufacturing) and timber, for 

 instance, go to the production of houses and iumiture. 



The third column gives in round numbers (000,000's being omitted) 

 the average national expenditure on each class of article at present and 

 for the last few years, and presumably also for the immediate future the 

 proportions at least, if not the absolute amounts, of expenditure (such 

 proportions, as shown in Mr. Gifl'en's reports on the variation in the 

 prices of exports and imports, remaining pretty constant during a period 

 of years). In the estimated amount of consumption allowance is made 

 for the addition to the value made before the articles are in the form in 

 which they are finally consumed. 



In column 4 these amounts (or proportions) are reduced to percentages 

 (of the total amount expended on such articles). 



In column 5 the relative importance proposed to be assigned to each 

 article in the index-number is stated, mainly on the basis of the per- 

 centages in column 4, but with modifications so as to substitute even 

 figures for the convenience of handling. 



In column 6 the specific articles are described, of which it is proposed 

 to obtain the prices as typical of the group really included on the corre- 

 sponding line in column 2. Wheat, for instance, consists of many different 

 kinds and qualities ; the one quality and kind it is proposed to quote as 

 typical of the whole is English wheat as returned officially to the Comp- 

 troller of the corn returns, which itself no doubt comprises many quahties. 

 Of iron, again, there are innumerable qualities and kinds ; it is proposed 

 to take Scotch pig-iron, in which there are large dealings, as typical of 

 the -whole. The same with other articles. In most cases large groups 

 are dealt with because the article selected is the average imported or 

 exported, which includes many qualities, but it should be distinctly 

 understood that in any case the most that can be done is to select specific 

 articles which are typical of large groups. 



In column 7 the source from which the quotation of the specific 

 articles mentioned in column 6 is to be obtained is stated. 



The above is of course only a rough suggestion for an index-number. 

 Even if the method is generally approved of, many questions might be 

 discussed as to the amounts of the annual consumption of each group of 

 articles specified in column 2, as to the relative importance to be assigned 

 practically in column 5, and as to the selection of the article in column 6 

 which is to be treated as typical of the group. It would be possible to 

 introduce two or more quotations instead of one for a particular group if 

 thought desirable, but this would be troublesome in working. For 

 practical purposes there must not be too many articles. Mr. Bdgeworth's 

 mathematical deductions as to the consequences of taking the price of 

 an article selected at random from a group, instead of the general average 

 course of prices for the group, appear to justify the expediency of this 

 procedure. 



Were such a general index-number introduced, and prices calculated 

 upon it backwards and forwards, it would be easy to rearrange it for any 

 special purpose, such as to give more or less weight to one or more 

 oTonps according as they are assumed to enter into the consumption of a 

 particular class of persons whose position at different times as affected by 

 L the course of prices is to be specially investigated. The index-number could 



