The Head Commissioner has peculiar notions about the nature of an average when, referring to Mr. Harrison's estimate of the average yearly loss of coinage, he remarks:

"This very precise figure can hardly be admitted to be correct for all years."

As if an average could be expected to be equal to each of the items averaged!

A knowledge of the theory of averages removes the sting from the following remark:

"Mr. Harrison is, apparently, himself dissatisfied with the outcome of his labours, for, when examined last year as a witness before the Currency Committee, he stated that he would not be surprised to find that the circulation, instead of being 128 crores (his latest estimate), was found to be 140 crores on the one side, or 90 crores on the other."

It is not quite clear what degree of surprise Mr. Harrison intends to indicate by this obiter dictum. A person who plays backgammon often would not be very much surprised at throwing three aces in succession. If Mr. Harrison is to be understood as assigning a corresponding degree of improbability to the limits 90 and 140 being overstepped, it follows from well-known principles that, supposing the usual law of error to prevail, at least roughly, a "probable error" of about 6 is attached by Mr. Harrison to his estimate of 115. Surely a result may be of some practical value even though liable to this degree of For instance, an index-number of prices may well be liable to as great a probable deviation.

error.

Our confidence in this result is not much shaken by the existence of certain inaccuracies in the data ::

"The returns cannot be accepted with implicit confidence, for every now and then evidence appears of neglect of duty. Thus, in May, 1894, two Bengal Treasuries reported the existence of coin dated 1894, though there is no such coinage, and it was afterwards acknowledged that the entries were mistakes. The same has happened in 1898, and again in the present year when the Amritzar Treasury returned 87 rupees of 1894, 100 of 1895, and 116 of 1896, while Sealkote reported 129 of 1894, 165 of 1895, and 116 of 1896, though there is no genuine coin of those dates. All the neighbouring treasuries found no rupees of those years, and it must be concluded not that there are perfectly made counterfeits in the Punjab bearing those dates, but that the persons entrusted with the duty of examining the coins, have, to use a slang expression, fudged these returns."

The correction of these errors does not seem to affect sensibly the average result. The incident is paralleled by the French monetary statistics from which M. De Foville, according to the method of Jevons, has calculated the number of five-franc pieces in circulation. A certain number of offices, he tells us, made returns of coins as having dates at which there was no French coinage. But the errors were not on a

scale to appreciably vitiate the calculation; the only consequence was to teach the offenders, by a severe reprimand, the danger of being too witty.

The Head Commissioner concludes by reflecting on the ingenious "inverse Jevonian" method which Mr. Harrison has based, not on the addition of new coinage to the circulation, but on the withdrawal of the coinage of date earlier than 1836. Taken by itself, Mr. Harrison admits, this elegant construction would not be strong enough to support the conclusion; if only for the reason that, as the amount of coin withdrawn forms a small percentage of the total circulation, a comparatively small error in the former is apt to considerably vitiate the latter. But, considered as an additional strand in the coil of circumstantial evidence, which is all that Mr. Harrison claims, this supplementary method has a certain cogency which the Head Commissioner's disparaging reflections do not invalidate.

On the whole, it appears to us that Mr. Harrison's method emerges from the test of the hostile criticism to which it has been subjected, not only unscathed, but even with added lustre. Merses profundo, pulchrior evenit.

F. Y. E.

OBITUARY.

CHARLES FRANKLIN DUNBAR, Professor of Political Economy in Harvard University, born in 1830, died Jan. 29, 1900. He took the degree of Bachelor of Arts at Harvard University in 1851; and his academic career was entirely in that institution. But it was twenty years after the attainment of his first degree before he entered the service of the University. For the greater part of this period he was connected with the Boston Daily Advertiser, of which he was Editorin-Chief from 1859 to 1869. The Advertiser represented the educated community of New England, and under Professor Dunbar's management it was a model newspaper, deservedly possessed of high influence. Professor Dunbar was a fervid supporter of the cause of the North during the Civil War, and some of his best writing was in the columns of his newspaper. He was naturally led to give much attention to the financial events of this period, -the issue of inconvertible paper currency, the establishment of the national banking system, the growth of the huge national debt,-and the experience with practical affairs thus gained was of much aid to him in his later studies on financial subjects. In 1869 the newspaper changed hands, coming into the possession of persons who were disposed to champion warmly the policy of protection. Professor Dunbar resigned the post of Editor, and disposed of his interest in the paper. He was soon asked to accept a professorship of Political Economy in Harvard University, and after No. 37.-VOL. X.

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two years of study and travel in Europe entered on the duties of that post in 1871.

Professor Dunbar's sagacity and administrative ability led early to his selection for important administrative offices. He was Dean of Harvard College from 1876 to 1882, and again Dean of the Faculty of Arts and Sciences (a newly organised body) from 1890 to 1895. These administrative posts, in which he served his University with filial devotion, absorbed a large share of his energy, and stood in the way of his plans of research and publication. At best he was slow to put himself forward, and modest and hesitating in the presentation of his views; though none the less independent and unswerving in stating them when once he had reached his conclusions. His published writings give very inadequate indication of the range of his scholarly work. His favourite subjects were currency banking, international trade, taxation and finance. But he was conversant as well with the course of economic theory, and widely read in theoretical literature, especially in that of England and France from 1750 to 1850. Economic history, especially of the period since the Renaissance, also attracted him, and he had delved into a large and varied mass of literature on this subject.

Professor Dunbar's best known book is his Theory and Practice of Banking, which, though brief, covers successfully and thoroughly the most important part of that subject, and is a model of analysis and exposition. When the Quarterly Journal of Economics was established by Harvard University in 1886, he was appointed its Editor, and remained in charge of the Journal for ten years. As the contents of the Journal during this period show, he was strongly desirous of promoting the discussion of fundamental questions of theory, and established the position of the Journal as a medium for the solid and scientific discussion of such problems. His own contributions to its columns were mainly on questions of currency and finance, and were but a small fraction of what he had hoped to do, and was quite prepared to do, with the materials which had accumulated in his hands. His health, never robust, was much enfeebled during the last few years of his life, and he was compelled, first to postpone, and at last to relinquish the execution of his plan for covering, in a series of essays, all the important episodes in the financial history of the United States. F. W. TAUSSIG

FRANCESCO FERRARA.-The illustrious economist who passed away at Venice on the 23rd of last January, had, like most of his contemporaries, led a life of adventures, divided between conspiracies and contemplation, between politics and science. Born at Palermo in December, 1810, he was in 1834 made Director of the local Board of Statistics. He founded the Giornale di Statistica, and contributed to it some notable essays on the coasting trade, on foundlings, and

other subjects, which were published in a separate volume in 1890, with the title Memorie di Statistica (Rome). In 1847 he was shut up in the citadel of Palermo for having taken part in the movement for the independence of Sicily. On coming out he became a member of the revolutionary Government. With the re-establishment of the Bourbons, Ferrara emigrated to Turin, where he was appointed to the Chair of Political Economy as Scialoja's successor. He opened his course of instruction with a brilliant oration on Malthus, which evoked praise and comment from Cavour. He continued his lectures at Turin

till 1859, then went for a time to Pisa. Thence, on the emancipation of Sicily, he went back to Palermo and undertook the office of controller of customs. In 1862 we find him collaborating with Sella in the financial reform which led to the institution of the tax on mill-hoppers (macinato). Attached thereupon to the Court of Controllers (Board of General Control), Ferrara was elected to represent his native city, and in 1867 was during several months Minister of Finance. Made Senator in 1881, he was then appointed Director of the Higher School of Commerce at Venice.

Ferrara's greatest contribution to economic science consists in the numerous introductions he wrote for the volumes of the Biblioteca dell' Economista. This highly important collection, in which are included translations of the most notable works by foreign economists, was edited very efficiently by Ferrara during the period 1850-70. The introductions he republished in a volume :-Esame storico-critico di economisti e dottrine economiche Torino, 1889-92. In it we have not only a series of critical, biographical and bibliographical observations regarding the specific works to which they were severally prefixed, but also an exposition of Ferrara's own theories. His system takes its starting-point in a theory of value, which he calls "l'idea madre della scienza economica," and which he develops with great skill, approximating closely to the doctrines of Carey. For, like Carey, he opposes the Ricardian theory of value, as well as that of Say, and lands himself in the formula of cost of reproduction, elaborating it with the highest sagacity. This theory, which Ferrara is instant in maintaining, seems to him to be the only one capable of resuming all economic phenomena under the unity of a single formula. This it can do, inasmuch as it explains not only the value of products which may be multiplied ad infinitum, but also of such as can be multiplied with increasing difficulty, as well as of monopolised products. And herein it differs from the Ricardian theory, which is constrained to create two laws, one to meet cases under competition, one to meet cases of monopoly. But besides this, the theory of cost of reproduction, according to Ferrara, throws much light on all the circumstances of the distribution of wealth, and helps to clear the problems of rent, wages and profits. It was above all the first of the three incomes on which Ferrara concentrated his studies. Strong in the faith of his theory of value, he set himself to demolish the doctrine of Ricardo and to

transform the reward of the owner of land into the natural and legitimate recompense of capital and labour. As a matter of fact, said he, land-rent is not the result of a growing cost of production due to the increasing sterility of new soils, but of a decreasing cost of reproduction, due to the increasing productivity of the labour employed on lands successively cultivated. It is therefore nothing else than the premium on the intelligence and superior ability of the cultivators of new soils taken into cultivation, and, in itself, involves not an atom of usurpation or injustice (obviously the Carey theory). The theory of cost of reproduction, he goes on to say, explains at the same time profits and wages. Profit is given by the cost of reproduction of capital; wages are given by the cost of reproduction of labour. Moreover, even in the theory of taxation, this doctrine remains valid. Each tax is fixed by the cost of reproducing the works required by Government, just as duties ought to be regulated according to the limit indicated by the cost of reproducing by way of smuggling.

These very remarkable compositions, not to mention many highly ingenious essays on banking and bank restriction, on the banks of Venice, on the tax, on mill-hoppers (macinato), &c., exercised an enormous fascination over the more elect minds of the peninsula, and sufficed to create round Ferrara a flourishing school of disciples and admirers. Indeed, one may say that for many years political economy in Italy has been represented exclusively by writers belonging to this persuasion,—writers who belauded Carey and Bastiat, considered Ricardo and Stuart Mill as dangerous and sophistical theorists, and abhorred the German economists as favouring Socialism and meddlesome tendencies in national legislation. But it is easy to see that such scientific exclusiveness was bound to become increasingly intolerable in proportion both as intellectual culture became diffused throughout Italy, and as the sharp contrasts of Italian social life were shown to give the lie in brutal fashion to all doctrinal optimism. Hence the decline of Ferrara's influence on Italian political economy, dating from 1870, and the growing band of dissidents who preferred the theories of English and German economists to those of French and American extraction favoured by the master. Ferrara marked the revolt, and in a famous article (published in the Nuova Antologia, August, 1874), denounced the younger economists as Germanisers, socialists and corrupters of the Italian youth. But his anathemas (to which Luzzatti replied triumphantly in the same periodical, September, 1874) had no perceptible effect. The new school spread ever further in Italy, and the veteran theorist of liberalism saw the breach ever widening in the ranks of his disciples. And so, feeling deserted and alone, he wrapped himself in disdainful silence, and only the few who had the good fortune to be near him in the last years of his life could appreciate the inexhaustible vivacity of his thought and the indomitable persistence of his scientific ardour.

Whatever be the verdict passed on Ferrara's theories, and however