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Show Index Figures for the Layman's Use in Interpreting the News By BODNgT DUTCHEB NEA Servtee Writer WASHINGTON, Feb. 14 Commodity Com-modity prices, Index figures, purchasing purchas-ing power of the dollar these are terms that canH be avoided in any informed discussion of tha business trend, the proposals for Inflation, Irving Irv-ing costs, wages and kindred matters which vitally affect us all. Proposed legislstlon of sn lnfls-Uonary lnfls-Uonary character designed to "restore "re-store the purchasing power of money" by raising commodity price usually bases its goal on tha "commodity Index." In-dex." Inflated currency, new bonds or federal reserve open market operations opera-tions would be used until the index figure rose to 100 or some figure nearby. Tha Rankin currency bill proposes that after the index figure is attained, currency thereafter should be expanded If it drops again below ST and contracted If It rises above 103. What ia this index figure, so commonly com-monly used? Where does it come from? An index figure Is a measure ef price, cost, volume or whatever you want to measure reduced to a percentage per-centage basis. . For Instance, you take the cost of a given arUcla, or group of articles, or the average of employment, employ-ment, for a selected basic year, and call that 100, arbitrarily creaung It as an Index figure. Subsequent fluc-tuationa fluc-tuationa from that year are computed in plus or minus In relsuon to the orlginsl Index figure. It someone says the Index for watermelons Is now SO, you knew that watermelons are 40 per cent cheaper than they were In the basic year. The general commodity Index Issued Is-sued monthly by tha bureau of labor statistics Is the best and most comprehensive com-prehensive standard of the comparative compara-tive measure of the average value of commodities on the wholesale market and the average purchasing power of money that has ever been established by any government It now Includes JH commodities. The basic year is 1S28. There was no fluctustlon In that year and It gave a fair average of commodity values and purchasing power tor the 1921-29 period, during which there was a fluctuation of only 1 or 4 per cent So both the general commodity Index and the Index for purchasing power of money which is representative represen-tative of It were established aa 100 for 1926. When th commodity Index figure falls below 100, represenUng a decrease de-crease In the wholesale price average, the purchasing power rises by Inverse ratio. Divide 100 by tha commodity index figure and you get the dollar's purchasing power. Thus, the genersl commodity index for 1932 was 64 and the average purchasing power of the dollar In wholesale prices was SIM. Your 192S dollar was worth $1 S on the wholesale commodity markets, while the producer or seller was receiving re-ceiving lass than SS cents for what would have brought him a dollar In 1926. It is Interesting, by use of Index figures, to compare present prices, prewar prices and peak prices and important because Index figures sre such s good reflector of relative prosperity pros-perity snd depression. The Index for all commodities Is now lower thsn prewsr 63.6 for lsst December, as against S9.S In 1911, although a peak of 1M.4 waa reached in 1920. Skipping through the depression period, one finds the general Index at 96.T for 1926, 66 4 In 1930, 78 1 In January of 1931, 67.3 In January of 1932 and lowest of all at 62.6 In last December. Among the ten major lines of commodities, com-modities, only three building ms-terisls. ms-terisls. fuel snd lighting, and house furnishing goods ere sbove the 1913 level. Highest of all in relation to the 1921-29 period la metals snd metal products. Indexed at 79.4. Lowest of all Is farm products, for which the index shows 71 S in 1913, 157 in 1919. 109 6 in 1923, 10S S In 1926, 64.6 In 1931. 48 1 In 1933 and 44.1 for last .December, |