South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-10-08
Price Movements Before
the Great War
RY PROF. IRVING FISHER.

BERKELEY, Calf, Oct This
afternoon at 400 o'clock Prof.
Fisher of Yale university gave the
first of his Hitchcock lectures on
price movements. His subject today
was Price Movements Before the
Great War" He said in part:
Before the war the whole world
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 it 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. With
out it we are apt to attempt the i'm
possible or to hang the wrong man
to the lamp post.
We have in this problem, as in
most great problems, four chief
questions to answer: What is it?
| Why is it? What Of it? What are we
going TO do about it? In other
words, we must study the facts. the
causes. the evils and the remedies
The first two lecturers will be on the
facts about price movements, the
present one being on the history Of
price movements before the war
and the second on their history dur
ing the war.
"Index Numbers"
We can get a very clear and ex-
act 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 articles do not move to-
gether but scatter or dispense like
the fragments of a bursting shell.
Yet there is always a definite aver
age movement IL therefore becomes
important TO know exactly what has
been this average change, l. e., 10
measure the general level Of prices
at one time as compared with an
other If. during, say. the last month,
one commodity has risen four per
cent and another has risen 10 per-
cent the average rise Of the two to-
gether has been midway between
four and ten or seven percent. This
is. 1O7 is the index number Of the
two as compared with 100 last
month as a base of comparison. The
same method applies TO more than
two prices.
Probably the best general index
number in use in the world today is
that recently adopted for wholesale
prices by DR.. Royal Meeker. com
missioner of labor statistics a.
Washington There are three hun
dred prices used in making up this
index number 1t is so calculated
that the prices of the more impor-
tant articles (as judged from their
consumption in the last census year,
are counted more heavily or giver
more weight" in making up the
, average than are those of less i'm
portant articles. Coal counts more
heavily in the average than matche:
and wheat is given more weight thar
4, peanuts.
II is a curious fact, however. thai
the most scientifically constructed
index number does not greatly differ
from the simple average" inde1
number. nor does il generally make
u much difference whether very man!
or only few commodities are in
Guided.
+, The Distant Past.
Index mum beers are a comparative
: lv modern invention. Not many gooC
ones extend back Of 1890. and still
: fewer have been computed back o
1860.
Jevons. the English economist
: who. more than any other, mad
the index number idea practicable
computed a good index number 10
England back 10 1882.
Others have computed rough in
ldex numbers back to the 18th cen
turv and. with some breaks. bacl
y even 10 the eighth century.
!, The "edict OF DiOcletion" in 30
A. d. affords data for a still NOR
ancient and still rougher compari
e. son The prices there mentioned @
In kinds OF foods are found %
n Prof. Ferguson OF Bryn Mawr)
be on the average so percent or S
10 percent of the prices in the Unite
states in 1912. In other words IN
index number OF prices for Rome
- sol A. D. stood at so OF so as com
pared with 100 in America tOda,
But this does not imply that IN
Roman people we're better on o
is the contrary. from the same eds
" We find that Roman wages weT