TRANSACTIONS OF SECTION F, 603 
Government for assistance. The Small Holdings Committee recommended that 
the Society should receivo a grant from the Board of Agriculture, and in the 
Small Holdings and Allotments Bill the importance of agricultural co-operation 
in the development of small holdings is recognised. In Ireland the Department 
of Agriculture makes a grant to the Irish Agricultural Organisation Society pro- 
portionate to the subscriptions which it receives from other sources, and it would 
greatly help to foster the movement in Great Britain if the Board of Agriculture 
would make a similar grant to the Agricultural Organisation Society. 
5. Some Considerations about Interest. 
By Professor E. C. K. Gonner, M/A. 
The main groundwork of interest. Causes for its existence under present 
social conditions, 
Two theories alleged in respect of its connection with accumulation and the 
provision of capital. These advanced to justify it as a branch of remuneration. 
These theories canvassed and points of difference indicated. Their interaction if 
both are operative. 
The second theory considered in more detail and with particular reference to 
two points: (a) The extent to which saving under interest by one generation 
renders unnecessary saving by subsequent generations. In this case a decrease in 
the net capital thus provided by one generation, should interest vanish, may be 
wholly or largely compensated for by more general saving; (4) the extent to which 
the elimination or even the great decrease of interest involves the growth of 
insurance. The general growth of insurance. 
6. Interim Report on the Amount of Gold Coinage in Circulation in the 
United Kingdom. See Reports, p. 3538. 
7. Index Numbers of Prices. By Professor A. W. Fiux, JA. 
The paper called attention to some defects of the ordinary methods of con- 
structing index numbers, as illustrated by such numbers as that of Sauerbeek. A 
formally unweighted average becomes in course of time effectively weighted. 
Thus in 1904 the index number for Java sugar was 40, that for Straits tin 121. 
In 1905 these became 45 and 136 respectively.. Equal percentage changes do 
not affect*the aggregate equally. Tin is practically weighted three times as 
heavily as sugar. 
In other index numbers, such as Bradstreet’s, the weighting employed is 
peculiar; yet the results correspond fairly with those of other authorities, in 
accordance with the general results of the Committee of this Section, which dealt 
with the matter some twenty years ago. 
A method which continually reverts to equal weighting seems worth trying. 
By determining each year the percentage change of price trom the preceding year 
for each of the commodities dealt with, and averaging the result, we have the 
material for building up a continuous index number free from some inherent 
defects of the method of the fixed-reference period. Some results of applying this 
process to the data used by the Bureau of Labour of Washington, U.S.A., were 
given. About 260 commodities contribute to this index number. 
When proceeding by this method the geometric mean of the items is sub- 
mitted to be more appropriate than the arithmetic. The actual results over the 
period 1890-1905, sixteen years, are very close to those obtained by the reference- 
period method, with an arithmetic mean, in the Bureau Index. 
Attention was also called to the probability that the study of the grouping of 
the index numbers of individual commodities about their mean may yield valuable 
results. The standard deviations of the groupings of the year-to-year price-indices 
