ON VARIATIONS IN THK VALUE OF THE MONETARY STANDARD. 253 



proposed by Professor Nicholson. • This standard — divested of certain 

 incidents which seetn to some of us not essential — may be defined by 

 substituting, in what we have described as the main standard, for 

 ' quantities of finished products consumed per unit of time ' the ' quantity 

 existing ' of all commodities whatever. The means of roughly evaluatino- 

 this measure are supplied by Mr. Giffen's paper on ' Recent Accumula- 

 tions.' This species of index is indispensable in deducing the increase 

 in the quantity of accumulated wealth from the increase in its total value. 

 Besides other general uses, this computation is specially adapted to the con- 

 struction of a so-called ' Tabular Standard ' for deferred payments. For 

 the scaling of certain kinds of debts this index-number might be required. 



(4) Another important special index-number is afforded by the 

 budgets of the average working man and his family, representing the 

 consumption of a large mass of the population. However, it is rather 

 with reference to other countries than England ^ that this estimate can be 

 included under the ' practical ' category of computations already performed. 



(5) Again, there are those of us who think that a special prominence 

 should be given to an index denoting the increase (or decrease) of general 

 wages. Wages certainly constitute a large part of the expenditure (in 

 the way of production, however, rather than of consumption) of an 

 important class, namely, employers {entrepreneurs). Wages constitute 

 the income of the majority, and the question (which more particularly 

 concerns us), How far money will go for any class ? is with difficulty 

 detached from the question. How much money have they to lay out ? In 

 fine, the rate of general wages is an indispensable datum for the in- 

 ferential estimation (in the absence of a direct measurement) of the values 

 of many finished products which enter into our principal standard. 



(6) The results of the last computation (perhaps, also, of the last but 

 one) maybe employed to calculate approximately an index-number which, 

 if it could be calculated precisely, might claim to be the principal standard. 

 This latent right appertains to the standard which is based upon the 

 purchases of the average consumer. As here conceived, this index- 

 number diffei's from that which we have defined as the principal standard 

 chiefly in carrying out more logically the idea which dominates both calcu- 

 lations. The formula of the auxiliary standard is, perhaps, more theoreti- 

 cally correct, though the numerical data entering into the formula may be 

 less accurately ascertainable. The data are now to be exclusively retail 

 transactions, the prices (in the absence of exact statistics) beino- esti- 

 mated inferentially from the rate of wages or otherwise. A greater 

 number of commodities, in fact all objects of consumption, instead of only 

 the more characteristic and important, shall now figure as items. In 

 particular there should be included, as forming part of the averacre 

 consumer's expenditure, residential rent, and the remuneration of profes- 

 sional assistance and domestic service. 



This index-number is at a disadvantage as compared with most of the 

 others, in that the required data are furnished by more or less conjectural 

 estimates. On the other hand, it has an advantage, as compared with 

 all the others or all except the fourth, in that the object which it purports 

 to measure is the object most important to measure, the value-in-use of 

 money. As compared with the fourth auxiliary index-number, the sixth 

 has the advantage of relating to the whole community. But there is 



' Journal of the Statistical Society, March 1887. 



' Sue Massachtuctts Labutir liejwrts for 1884 ; and E Yount;'s Labour. 



