Methods Used

For this purpose the materials used for the statistical calculations are chiefly two: ‘P’, the index number of wholesale prices of the United States Bureau of Labor Statistics, and ‘T’, the Index of Trade of Professor Warren M. Persons. The period covered by the trade series is from August, 1915, to March, 1923, inclusive.

I take this opportunity to advocate the use of an index of the physical volume of trade in place of the vague and most meaningless index of ‘business’ so commonly employed hitherto. ‘Business’ is a cloudy concept. An index of ‘business’ consisting of a mixture of three such essentially different categories as quantities, prices, and values, seems to me as absurd as an index of ‘weather’ which would jumble together, in a single average, such unlike elements as temperature, humidity, cloudiness, barometric pressure, and wind velocity. No meteorologist would insult his science by such an average index of the weather. The atmospheric weather is not to be put in any one figure. No more is the economic weather. But physical volume of trade has a definite and important meaning or set of meanings, just as it does temperature or barometric pressure.