SEPTEMBER. 



The monthly evening meeting of the members of the Royal Society 

 of Tasmania was last held on Monday, September 7th, in the Art 

 Gallery of the Museum. A lecture on " The Primary Law of Value or 

 Price," by Mr. R. M. Johnston, E.L.S., Government Statistician, was 

 given. 



Mr. Bernard Shaw presided, and among those present were : — The 

 Treasurer (Hon. P. 0. Fysh), Messrs. F. W. Piesse, M.L.C., N. B. 

 If wis, M.H.A, Henry Dobson, M.H.A, Rev. J. B. W. Woollnougb, 

 M.H.A., etc. 



The Secretary (Mr. Alex. Morton) read a letter from His Ex- 

 cellency's private secretary, intimating that owing to domestic bereave- 

 ment Lord Gormanston was unable to attend. Letters of apology were 

 also read from Sir James Agnew, the Premier (Sir Edward Braddon), 

 the Minister of Lands (Hon. A. T. Pillinger), Hon. T. Reibey, M.H.A., 

 and Mr. Mackenzie, M.H.A. 



The Chairman having formally introduced the lecturer, 



Mr. Johnston" first spoke of the proper use of economic, terms. 

 Under the generic term "wealth" there was exchange wealth, social 

 Wealth, national wealth, cosmopolitan wealth, capital wealth and 

 Consumable wealth. Many used the term "wealth" in a loose way. 

 in the same way there was individual capital, consumption capital, 

 fixed capital, auxiliary capital, potential capital, circulating capital, 

 and personal capital. Then there was utility— total utility and 

 marginal and final utility. Under "value" there were such ex- 

 pressions as price or exchange value, money value, unit of value or 

 ratio of exchange, economio price, present value, deferred value, capital 

 yalue, and annual value. Under "rent" there was ground and build- 

 ln g rent, producer's rent, ability rent, wage-earner's rent, economio 

 rent, and quasi-rent. " Under price"— economic price, equilibrium 

 price, monopoly price, loan price, fancy price, famine price, robbery 

 a nd violence price. Then under "wages" were nominal or money 

 wages, and a more important thing — rent wages, or purchasing power. 

 He expounded the proper applications of these terms. There was 

 the primary law of value or price, and that was the subject of his 

 discourse. He argued that economio cost of production (and not the 

 Wlusive and indefinite so-nething called the ratio of demand and supply), 

 Was the primary law which regulated and determined the respective 

 ratios and prices at which the precious metals and all ether commo- 

 dities and services exchanged with each other. The "scarcity of 

 gold" theory of the decline of prices could not be reconciled with 

 plain facts, for the decline of 58 per eent. in cotton cloth was conjoined 

 with an increase of 112 per cent, in the wages of the operatives since 

 1847. The fall of 58 per cent, in prices was likewise irreconcilable 

 With the ratio of demand and supply theory. Cheapened cost of pro- 

 duction, the true primary law of economic price, was the only theory 

 which harmonised with all the facts. Theories as to the scarcity of 

 gold or the appreciation of gold and ratio of demand and supply, which 

 could only at best be reconciled with a very small part of the facts, 

 must be abandoned as unsatisfactory and altogether misleading. Supply 

 Was subordinate, and depended upon demand, whilst the cost of produc- 

 >ng the supply was the primary law which determined its economio 

 price. Then if it be true that cost of production was the true primary 

 law of economic value or price, it might be confidently asserted that 

 any attempts made by Governments to fix arbitrary laws for deter- 

 mining the relative exchange values of any commodities (such a« gold 

 and silver in the scheme of bimetallism) would be as futile as to pass 

 arbitrary laws for determining the absolute specific gravities. The true 



