Emerson uses the familiar relationship between smoke and fire to illustrate the idea that visible effects point towards underlying causes. Smoke is evidence of combustion, so observing it gives reason to infer something that may not yet be directly seen. The statement therefore expresses a simple principle of reasoning: consequences and signs can provide information about the forces that produced them.

Within Compensation, the example supports Emerson’s broader argument that actions and conditions carry corresponding effects. He repeatedly presents the world as structured by relationships in which causes generate consequences, whether in nature, conduct or society. The sentence should not be treated as a strict scientific rule, since smoke can arise in different circumstances. Its main function is illustrative. Emerson uses an easily understood example from everyday observation to reinforce his wider claim that effects are not isolated events but can be traced back to underlying causes.