ON VAEIAIIONS IN THE VALUE OF THE MONETARY STANDARD. 261 



The delicate subdivisions of the subject are exhibited in the annexed 

 diagram by means of a regular logical tree ^ In examining this tree of 

 knowledge we shall give priority to the branches on the left. As soon as 

 we have reached the definition of each ultimate species we shall add its 

 properties — the treatment adapted to that particular case. We shall not 

 only trace out the form of each branch, but also gather the fruit at its 

 extremity, before we go on to the branch nearest on the right. 



The whole subject is first divided according as the method adopted is 

 (A) irrespective of any hypothesis as to the cause of the price movements 

 or (a) is based on some such theory. Defei-ring the treatment of the 

 latter case (a) we proceed to divide the former according as (A B) the 

 practical purpose in view is to construct a standard or ' Unit ' for 

 deferred payments, or (A b) some other purpose. Postponing the latter 

 case, we may complete the definition of the former by explaining that 

 the Unit (a term borrowed from Professor Marshall's recent article in 

 the 'Contemporary Review'), as used here in a general sense, means a 

 sum of money estimated to be equivalent at present (or at some future 

 time) to what a Unit of money, say a pound, was worth at some past time : 

 in such wise that it may be just or expedient for debtors to pay, and 

 creditors to receive, as many Units now (and from time to time) 

 as they contracted to pay and receive pounds at the initial epocb. 

 The general idea of a Unit may be specialised according as it is 

 required that (ABC) the Unit should constantly be equivalent to the 

 same quantity of valuables, or (A B c) that it should not represent a 

 constant purchasing power, but one varying with the means of debtors, 

 after the manner of a sliding scale. Lastly the kinds and quantities of 

 the valuables entering into the Unit may either (A B C D) correspond to 

 the items of national consumption, or (ABC d) may be selected on some 

 other principle. In this arrangement priority does not import any 

 preference, 



Section II. 



Determination of a Standard for Deferred Payments ; based upon the items 

 of national consumption ; calculated to afford to the consmner a constant 

 value-in-use ; 7io hypothesis heing m,ade as to the causes of the change in 

 prices. (A B C D.) 



According to this arrangement, the first case for which we have to 

 prescribe is where, apart from any hypothesis as to the cause of the 

 movement of prices, we want to construct a Unit adapted to deferred 

 payments, and where it is required that the Unit should be constantly- 

 equivalent to the same amount of valuables, the kinds and proportions of 

 the valuables corresponding to the items of the national expenditure. 

 Upon reflection it will be found that the last attribute involves, or is 

 deduced from, some such condition as the following — that the advantage 

 which an average person derives from the expenditure of a Unit should 

 be constant.^ 



' As logical and genealogical trees for the most part, like the trees in the poet 

 Parnell's Hermit, ' depending grow,' it may be as well to point out to the reader that 

 our tree, like those cultivated by some of the eailier logicians, is trained vj)wards. 



- Cf . Horton, Silver and Gold, chap. iv. ' In the average annual consumption of 

 provisions ... we should have at least fixed a definite portion of utility. ... By 

 enlarging the sphere of consumption on which to base the average ... we still more 

 nearly attain a measure of the value of Money.' 



