The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1917-10-05

Before the war the "nOle WOTIu
was ringing with complaints of the
high cost OF living" and although
the war at first put the question in
the background the final effect has
been to make IL more prominent than
ever The newspapers are again full
OF theories as to the cause of this
new elevation of prices. as well as
of proposed remedies. The country
seems now. unreasonably, to expect
Mr.. Hoover to perform a miraculous
cure.
But the whole discussion shows
bewilderment in the public mind.
while there was never more need OF
straight thinking than now. Without
1t we are apt TO attempt the impos-
sible or to hang the wrong man to
the lamp post.
We have in this problem. as in
most great problems, four chief quesT
tions to answer: What is IT? Why is
it? What of it? What are we going
to do about 1t? In other words, we
must study the facts, the causes, the
evils and the remedies. The first two
lectures will be on the facts about
price movements. the present one be-
ing on the history OF price move
ments before the war and the sec
ond on their history during the war.
"Index Numbers"
We can get very clear and exact
picture Of the average increase in
prices or the cost OF living by means
Of the now familiar index number
Of prices. The prices Of various ar
ticles do not move together but
scatter or dispense like the fragments
of a bursting shell. Yet there Is al
nj
Il therefore becomes important to
know exactly what has been this ay-
erage change, /. Q. to measure the
general level of prices at one time
as compared with another. II, during,
say, the last month, one commodity
has risen 1 per cent and another has
risen 10 per cent the average rise OF
the two together has been midway
between 4 per cent and 10 per cent
or Z per cent. That is. 1O7 is the
index number Of the two as compar-
ed with 100 last month as a base
Of comparison. The same method ap-
plies to more than two prices.
Probably the best general index
nunber in use in the world today Is
that recently adopted for wholesale
prices by DR.. Royal Meeker, com
missioner of labor statistics at Wash
ington. There are three hundred
prices used in making up this INDEX
number. 1t is so calculated that the
prices OF the more important ar
ticles las judged from their con-
sumption in the last census year,
are counted more heavily or given
mora weight" in making up the aY-
erage than are those of less import
ant articles. Coal counts more heavily
an the average than matches and
wheat In given more weight than
peanuts .. -.
n is a curious fact. however. that
the most scientifically constructed
index number does not greatly diner
from the simple average" index
number. nor does 1t generally make
much difference whether very many
or only a few commodities are In
cluded.
Tndax numbers are a comparative
l., modern invention. Not many good
ones extend back to 1890. and sun
fewer have been computed pack VI
1860. ,.,.t
who. more than any other maze the
index-mumber idea practicaple' Goln-
puted a good index number Tor big
land back in 17Sz. -,. ,,,sa,,
Others have computed rough inoeX
r,T.he,. hack to the thirteenth CEN
turv and. with some breaks DaSA
even to the eighth century. "a,
The "edict of Diocletion" In Sot
oSrords data for a still more
Ar ancient and stilI rougher comparison
The prices there mentioned OF eleven
kinds of foods are found 10y pFo Oh
tSa sS Yer so per cent or SO per
cent sso Of the prices in tbs United
index number Of prices for sS ns
~ soi A. d. stood at 30 or % a.
n IN TSl with 100 in America to-
S SaY. But this does not imply that tina;
the Ss Roman people were r.. s better sS Gti
On the c sSat Roman wages were only
J ns s,t'S cent to 20 per cent Of Amer.
g.. per wages S in 1919. That is the
Roman workman got, T. say ay the ~ o pdE
cent of the money wages OF III" HAO1