ON VABIATIONS IX THE VALUE OF TUB MONETABT STANDAED. 133 



Tldrd Report of the Committee, consisting of Mr. S. Bourne, 

 Professor F. Y. Edgewortii {Secretary), Professor H. S. Foxwell, 

 Mr. Robert Giffex, Professor Alfred Marshall, Mr. J. B. 

 Martin, Professor J. S. Nicholson, Mr. R. H. Inulis Palgrave, 

 and Professor H. Sidgwick, appointed for the purpose of inves- 

 tigating the best methods of ascertaining and measuHng Varia- 

 tions in the Value of the Monetary Standard. 



The Committee have had under consideration the preparation of an 

 official Index-number which might be employed by parties making 

 contracts with respect to a distant future. They have met repeatedly 

 and discussed the bases of this scheme. They have been in communica- 

 tion with the International Committee, which has been reappointed for two 

 years by the International Statistical Institute. As it is desirable that 

 the subject should receive further consideration, they recommend that they 

 should be reappointed. 



MEMORANDUM BY THE SECRETARY. 



ANALYSIS OF CONTENTS. 



KECTIO^ PAGE 



I. Professor Newcomb's Method . 133 



IL Professor Foxwell's Method .134 



III. Mr. Giffen's Methods . . 139 



lY. Mr. Bourne's Method . .150 



SECTION PAGE 



V. Sir Eawson Eawson's Method 152 



YI. The present Writer's Method. 156 



YII. Eicardo's Method . . .161 



Conclusion 162 



This paper is designed as a supplement to the Memorandum appended 

 to the First Report of the Committee. It will be remembered that the object 

 of that Memorandum was to distinguish the different definitions which 

 the proposed problem might present ; and to construct the formula ap- 

 propriate to each phase of the investigation. 



Section I. 

 Professor Neivcomb's Method. 



One additional definition of the quoasitum which has come under 

 the writer's notice since the completion of that Memorandum is that 

 which has been propounded by the eminent mathematician Professor 

 Simon Newcomb, of the Johns Hopkins University. He proposes to 

 measure the variation in the value of the Monetary Standard by the 

 change in the volume of value which is produced by the labour of an 

 average individual in a unit of time.' He writes : ' One possible hypothesis 

 would be this. Wo might assume that the absolute value of everything 

 produced by the population of the country remains unchanged, except 

 that as a population increases the total value produced increases in the 

 eame ratio. In other words, we may suppose the average productiveness 

 of each individual to remain the same from year to year.' 



Now this hypothesis may appear doubtful in the light of the statistics 

 furnished by Mr. Edward Atkinson and others. There is reason to think 

 that in an improving country the productivity of labour increases. But 



Principles of Political Econoviy, Book 3, ch. ii. § 



§ 10. 



