298 BEPOET— 1887. 



adherents of tbis Consumption- Standai-d, miglit not consent to merge an 

 estimate so formed with the results of those who adopt a fundamentally 

 diflPerent principle ; for instance, Dr. Geyer's method, or another men- 

 tioned by him, which may thus be described. Take the price of each 

 ware, jnst as it has been quoted. Add together these figures. The 

 ratio between this aggregate at one epoch and the aggregate at another 

 is put for the measure of the valuation in the purchasing power of 

 money. 



The doctrine of the Mean, or principle of collated authority, admits of 

 a certain analogical extension beyond mere arithmetical results to the 

 determination of a function or form of combination. Accordingly that 

 solution of our last problem, which is offered in the Report herewith 

 printed, derives a certain confirmation, and the only sort of proof 

 of which it is capable, from the general assent which it has received from 

 the Committee of experts who have been apj^ointed to consider this 

 subject. A short analysis of that Report may fittingly conclude this 

 Memorandum. 



The first part of the Report points out the necessity of distinguishing 

 in theory several ends and methods [such as those which have been 

 analysed in the preceding sections], the expediency of in practice giving 

 precedence to some one mode [such as it is the main object of this 

 section to discover]. 



Part II., A, of the Report sets forth this mode, ' the jirincipal standard.' 

 It is a compromise between the principles of the Consumption-Standard, 

 A B C D, and the more objective Mean, af; an unequal compromise, 

 inclined in favour of the first principle.^ Agreeably to the first prin- 

 ciple, yet without prejudice to the second,^ the ' weights ' of the price- 

 variations are the quantities of commodities. The form of combination, the 

 'arithmetical' mean (or linear function), is pi'escribed by the first prin- 

 ciple. In deference to the second principle, if not entirely on account of 

 statistical exigencies, the prices used are wholesale prices, and the items 

 of domestic service and residential rent have been excluded. 



Part II., B, of the Report propounds six ' subsidiary ' index-numbers. 

 Of these, three, Wages, Worhne^i^s Budc/ets, and Expojis and, Imports, 

 may be regarded as corresponding to those ' partial interests,' which 

 were noticed at the end of the Introductory Analysis as of especial im- 

 portance. Of the remaining three, the index-number based on Wholesale 

 Goods in General may be perhaps put for the Producer's Standard, here 

 designated A B c d E.^ There remain the Consumption-Standai'd, 

 ABC D,^ and the Capital- Standard, A B c d e ;^ the former pure and 

 simple, the latter shorn of the item of labour, to which it may have 

 some claim."* 



Considering the importance of the last-named species, it may be well 

 to justify our treatment of it, in not only curtailing its items, but also 

 not adopting it (in preference to the Consumption-Standard) as the 

 framework of the ' principal ' index. It will be recollected that the 



' In givirg these reasons the writer speaks only for himself. 



= See Section IX. p. 290. 



^ For convenience of reference the symbol B has been retained here; but the 

 meaning would be more exactly expressed by omitting it, or substituting (B + b). 

 We are not here concerned to distinguish whether the index-number is to be used as 

 a Standard for deferred jiaijmcntg, or with some other view. 



* See p. 276. 



