ON YAHIATIONS IN THE VALUE OF THE MONETARY STANDARD. 255 



the more general purposes of monetary science, to interpret the past and 

 forecast the future. 



Let us add a few words on each of these methods separately, to ex- 

 plain more clearly either the means adopted or the end proposed, or how 

 far those means are conducive to that end. 



(1) The general principle of the first method may be embodied in 

 slightly different rules, of which the following two may claim to be the 

 best, (a) In order to ascertain the change in the value of money between 

 two epochs, find the national • expenditure per head upon finished pro- 

 ducts or articles of consumption (including unproductive services) at 

 each epoch. The ratio of the new to the old expenditure is the requn-ed 

 measure of depreciation, or Unit. Otherwise (/3) thus (the general prin- 

 ciple being interpreted somewhat differently) : Find the quantities of 

 each article consumed at the two epochs, and take the mean of each 

 couple. Multiply each of these mean items by the old ^^rice of the 

 corresponding article and add together these amounts. Proceed similarly 

 with the new prices. The ratio of the latter sum to the former is the 

 required Unit. There are other formulas, in all more than half a dozen. 

 But there is not much to choose among them. And the exercise of 

 a choice may exceed the powers and province of the writer.- 



The advantages of rendering money a steady measure of value-in- 

 use would be considerable wherever there may be violent fluctuations of 

 general retail prices.^ Such oscillation in the purchasing power of money 

 intensifies the ups and downs of Fortune — so trying both to the sentient 

 and the moral nature of man. The disturbance superadded by a bad 

 currency might be annulled by a corrected standard. The honest labourer 

 ■would not be cheated of his reward by miscalculations of the value of 

 currency. Those who had laid out their lives upon the faith of a fixed 

 income would not be disappointed of their just hopes. The provision 

 for the widow and the orphan would be more secure. The endowments 

 of learning would preserve that constancy of competence which is 

 favourable to the cultivation of the liberal arts. 



These great advantages seem capable of being largely realised. For 

 it is shown by statistics, such as those of Bngel * and the Massachusetts 

 Labour Reports,^ that there is considerable constancy in the budgets of 

 family expenditure. Thus in Massachusetts in 1885 the average°work- 

 man spent out of 100 dollars 29-5 upon groceries, 197 upon provisions, 

 ~ 4-3 upon fuel, and so on. Suppose a Unit or corrected dollar continually 

 equivalent to the amounts of groceries, provisions, fuel, &c., which in 

 1885 were respectively purchased for -295, -197, and -043. There is 

 reason to believe that such a Unit would afford a tolerably constant sum 

 of satisfaction to the Massachusetts working family. But we cannot 

 expect an equally perfect measure, when we construct a Unit, not for a 

 class, but a nation." 



^ See below, p. 272 ; and p. 262, note 3. 



= To choose between the first of the rules just given and the secord is beyond 

 the scope of this paper (see below, p. 25'J). 



' The ad\antages of a ' Tabular Standard of Value ' have been pointed out by- 

 many writers. See Jevons, Currency and Finance, p. 122, and the references given 

 in the note. 



\ Volkm-irthschaftliche Zeiifrage, Heft 24. Inst. Natl, de Statistique, N. 5. 

 For 1885. See also Young, Labor in Eurojw and America. 



"■ Professor Foxwell writes : ' I think it would also for many purposes be 

 extremely convenient to have an index-number, or numbers, indicating the altered 



