272 REPORT — 1887. 



one of those questions of la haute politique which it is not our business to 

 decide. 



If it is judged desirable that the Unit should represent a quan- 

 tity of wealth varying with the national affluence, a simple method of 

 eflFectiug that condition is to put for the Unit the ratio of the national 

 expenditure on articles of consumption at the later epoch to the cori'e- 

 sponding expenditure at the earlier epoch. Employing the same nota.tion 

 as before, we have now the formula 



apa+/^pfi +&C. 



If it is judged desirable to compare not the absolute expenditure, but the 



amount relative to the number of the population, we ought to multiply 



N 

 the above written expression by the factor — , N and N' representing the 



number of the population and the earlier and later epochs respectively. 



This method appears to the writer to deserve more attention than it 

 has received. The result would probably be much the same (in the case 

 of short intervals at least) as for the more familiar formula. But the 

 construction would be simpler as not requiring a mean to be taken ' 

 between the quantities consumed at different epochs, and the philosophic 

 basis would be free from the difficulty which besets the equation of 

 utility. 



Section V. 



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



of national income or upon prices which affect the income of any class ; 



varying with such income or prices, after the manner of a sliding scale; 



no hypothesis being mode fs to the causes of the change in prices. 



(ABcdE.) 



Another method of accommodating debt to the resources of the 

 debtor is to take income as our sliding scale. ^ The received estimates 

 of national income may be employed for this purpose. In this case the 

 Unit might be in effect an assigned proportion of the national income per 

 head of the population. 



It should be observed that this standard, revised at most once a year, 

 would not be adapted to the more transient fluctuations of industry. 

 Accordingly it might be worth while to consider whether we could derive 

 a more flexible measure of income from the prices of certain articles. Let 

 us begin with a simple case — an importer of articles of consumption, say 

 of the species a, who might be considered as paid by commission on the 

 amount of his dealing. His income then varies with the price of a in the 



ratio i-^. In the interest of this class exclusively the unit ought to be 



' See above, p. 264. 



- The principle of the sliding scale may be contrasted with the ' Consumption 

 standard ' in two distinguishable cases — (1) First, we may suppose national wealth, 

 the average income, to increase (or decrease) ccsteris paribus. In this case the proper 

 items on which the sliding scale Unit should be based appear to consist of the expen- 

 diture on finished products (our A Be D). (2) Secondly, distribution maybe supposed 

 to vary. To adjust the Unit to this variation we have to take account of wages and 

 other distributional transactions ; also of materials as affecting tlie incomes of certain 

 classes. 



