6 Flux, Fall in Prices during the past Twenty Years. 



permissible to suggest that the measurement we obtain 

 of price- variations is one not very far from what we 

 should obtain if we were able to satisfy ourselves in 

 regard to the price and quantity of every item of the 

 trade. (For the algebraic examination of this point, see 

 Appendix.) 



The results are very similar to what are indicated by 

 the two index numbers already considered for the years 

 1876-86. The import prices averaged 33 %, the export 

 prices 40 % in 1876 above the 1886 level. (The exports of 

 domestic produce, and total imports less re-exports, are 

 here used.) Subsequently the import price is persistently 

 below the level of 1886, and in 1895 reached 20% below, 

 recovering 1 % in 1896. 



The export prices, however, follow a course after 

 1886 more closely analogous to that indicated by the 

 Economist index number, falling 1 % to 1887, then rising 

 to 10% above 1886 in 1890, and thence falling to 6% 

 below standard in 1895, recovering somewhat in 1896. 

 Plate 14 shows the movements. 



It appeared to me to be of interest to try to compare 

 these index numbers with the others we have been dealing 

 with. The basis I have employed is the following. The 

 exports of our own produce may serve to gauge the price- 

 variations of goods produced at home and consumed at 

 home, for if the prices obtained in the wholesale markets 

 for similar goods for export and for home consumption be 

 not identical, the percentage variations from year to year 

 may nevertheless be the same, and this may hold, spite of 

 the fact that many things are made and consumed at 

 home which are not made for export ; the imports which 

 are not again exported do enter into the home trade, 

 though some of them, even a great part of them, are 

 exported after manufacture ; the relative importance 

 assigned to the price-variations of each is somewhat arbi- 



