ON VARIATIONS IN THE VALUE OF THE MONETARY STANDARD. 259 



purely statistical, that we seek a merely objective result. The difficulty 

 is that any combination — at least, any symmetrical combination — of the 

 data is in a sense objective. We must call in mechanical science to detex'- 

 mine what combinations are worth forming and what are insignificant. 

 Consider the two combinations 



MiVi2 + M2V2' + &c. + M„V„2 and Mj^ Vi+M./ V2 + &c. + M„2 V„. 



Prima facie, these are both equally ' objective,' and they seem equally 

 simple. But while the former (the expression of energy) constitutes a 

 spell for opening all the secret chambers of Nature, the latter could only 

 be significant on some very peculiar hypothesis, for some very out-of-the- 

 way purpose. 



Similarly, in the problem before us we have to combine two sets of 

 data, the prices of different articles and the quantities thereof. Indeed, our 

 problem is rather more complicated. We may have to take account of a 

 third attribute, the quality or species of wares ; to consider, for instance, 

 whether the price and quantity of labour or of materials shall enter fari 

 passu and symmetrically into that combination of our data which we 

 desiderate. 



In order to discover the principle on which this combination is to be 

 effected, we may be led into the most perplexed regions of monetary 

 science. We are brought against the question, "What is the relation 

 between the amount of money in a country and the general scale of prices ? 

 — the question which has been called by a distinguished authority ^ ' one 

 upon which the most contradictory opinions have been expressed by 

 economists of reputation.' And even where there are no fundamental 

 differences of theory, yet practice may vary according to the practical 

 end in view. Some may aim at the construction of a tabular standard, 

 adapted only to contracts extending over a long period of time ; others 

 may desiderate a more flexible standard, which may mitigate the effects 

 not only of the secular, but also of the more ^ transient variations in the 

 value of money ; others may seek only an index of the future course of 

 prices — a sort of monetary barometer. 



There are therefore many methods — not one method — of ' measuring 

 and ascertaining variations in the value of money.' The path which we 

 have to investigate has many bifurcations. To decide at each turn which 

 is the right direction is either impossible, or at least presumptuous. It is 

 impossible when both ways are right, directed to different but equally 

 legitimate ends. And, even where there must be a right and wrono-, 

 it is not becoming here to pronounce upon points controverted by high 

 authorities. The course adopted is to trace separately the alternative 

 paths, indicating the difference without expressing a preference. 



In this memorandum it is proposed to distinguish the various cases 

 of the general problem, and to construct the formula appropriate to each 

 case. The numerical determination of the quantities which enter into 

 the formuliB — both the compilation of the proper figures from explicit 

 statistics, and, where these are wanting, the more speculative arts of in- 

 ferring unknown prices and amounts from imperfect data and indirect 

 indications — these parts of the subject are not treated by the present 

 writer. They may be considered in a future Report of the Committee 

 and in separate memoranda contributed by other members. 



' General Walker in his Money. 



"^ As Professor Marshall hopes ; Contem^wrary Revierv March 1887. 



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