ON VAEIATIONS IN THE VALUE OF THE MONETARY STANDARD. 257 



These are fascinating images, ideal possibilities, whicli the sober thinker 

 may entertain while he is conscious how remote and uncertain is the 

 realisation ; how numerous the difficulties and objections. Perhaps the 

 new organisation of the money market would develop new varieties of 

 roguery. Certainly complications would arise between liabilities to the 

 foreigner expressed in gold, and engagements with the home trader ex- 

 pressed in the adjusted eui'rency. It is alleged, too, that the business of 

 banking would be impeded. In fine, the common sense of business men 

 appears opposed to the scheme ; and, on the question what is at pi'esent 

 practicable and what not, the opinion of practical men, even unsupported 

 by reasons, is conclusive. 



(3) The third inquiry is, "Wliat is the appreciation (or depreciation) 

 which it is the object of bimetallism and similar projects to correct ? 

 What is that mean (or function) of prices which the bimetallist would 

 desire to keep constant ? Of course, if prices varied all in much the 

 same ratio, like the lengths of shadows with the advancing day, the 

 answer would be very simple. That ratio is the required measure. But 

 suppose that one large category of prices is pretty uniformly elevated, 

 while another is en bloc depressed ; we desiderate a measure which, like 

 the two preceding, may be independent of the particular hypothesis that 

 there has been a uniform average price-variation all over the field of in- 

 dustry. Upon reflection it will be found that the required measure can 

 be none other than one of the two preceding or a cross between them. 

 The bimetallist may be satisfied that his object is attained when the 

 (above-defined) ' Unit ' is anity. See pp. 278, 279. 



It is to be observed that the Unit required for this purpose cannot be 

 restricted to a particular geographical or industrial area. Rather the 

 averaging must be extended over the whole system of countries in mone- 

 tary communication — that is, over the greater part of the civilised and 

 uncivilised world. 



(4) When we consider the next type, the fourth definition of our 

 problem, there once more is pressed upon us the expediency of limiting 

 the area of markets over which our measurement is to extend. It may 

 be doubted whether a standard based upon the variation of all prices 

 indiscriminately would — abstracted from some definite particular purpose 

 such as those contemplated in the preceding paragraphs — be of much 

 scientific use. It would be like taking the mean barometric pressure 

 over a large continent. It is more useful to observe the variation 

 of pressui-e at particular stations, in order to predict what changes 

 will be propagated to neighbouring regions, what storms are coming. 

 Suppose, for the sake of illustration, that at any station the reading of a 

 single barometer was not sufficient to give the true pressure ; that each 

 instrument was liable to a proper disturbance over and above the general 

 atmospheric change. The heat or cold, for example, of different situa- 

 tions might cause a misleading expansion or contraction of the mercury. 

 On such a supposition it might be proper, in order to measure the 

 pressure at any station, to take a mean between the readings of several 

 barometers. Upon well-known hydrostatical principles, no particular 

 importance, other things being equal, would attach to the reading of the 

 barometer which contained a particularly large mass of mercury. 



These conceptions appear appropriate to our problem. We should 

 demarcate a certain region of industry, and estimate in terms of that 

 special group of articles an index-number indicative of changes which are 



1887. s 



