120 



TWELFTH REPORT. 



in advance, and wages follow rather tlian precede prices in the npward 

 movement. If curves indicating- the course of wages and that of prices 

 are plotted and compared it at once appears that a drop in prices nearly 

 always precedes one in Avages and that the drop is general^ at a lower 

 rate in the case of wages. 



The facts as to the movements of general wages (so called) are briefly 

 as follows. The index number of full-time weekly earnings used by the 

 V;-. i>. Bureau of Labor — based on a weighted average bv industries with 

 the average for 1890-99 as 100— was 99.9 in 1898, lOi in 1900, 114 in 

 1905, and 122.4 in 1907. — u rise of 22.4';r. This seems quite representa- 

 tive as tested by the statistics of certain states. New York, for example, 

 publishes an index number for 46 industries, — unweighted, and with the 

 average for 1899-01 as 100,— which starts at 92 in 1898 and ends with 

 122 in 1907. — an advance over the base of 22^. Taking Ohio's figures 

 and roughly constructing an estimated series with the average yearly 

 earnings for 1899-01 as a basis, we get an advance of 19%. New Jersey's 

 statistics of yearly earnings makes the index number for 1907 equal 

 110,- the average for 1899-01 being 100. As compared with 1898 these 

 figures show a rise in average earnings of from 18% to 30% for 1907. 

 The figure for the United States, 22.5, lying approximately half way be- 

 tween seems conservative. 



The movement of relative wages during the decade 1898-1907 is shown 

 in the following table. 



Year. 



1898 

 1899 

 1900 

 1901 

 1902 

 190.3 

 1904 

 1905 

 1906 

 1907 



u. s. 



(1890-99 

 =100). 



99.9 

 101.2 

 104.1 

 10.5.9 

 109.2 



112. 3 

 112.2 

 114.0 

 118.5 



122 . 4 



N. Y. 

 (1899-01 

 = 100). 



92 

 100 



97 

 103 

 105 

 109 

 108 

 115 

 122 

 122 



N. J. 

 (1899-01 

 = 100). 



98.0 

 99.1 

 99.9 

 100.9 

 105.6 

 106.5 

 106.3 

 110.1 

 112.0 

 116.9 



Ohio. 

 (1899-01 

 =100). 



94. 



97. 



98. 

 104. 

 109. 

 113. 

 112. 

 114.9 

 118.7 

 118.9 



II. 



THE TRANSITION FROM PARTICULAR TO GENERAL. 



But new general price levels do not come in one '^fell swoop" and, 

 as Hume long ago pointed out and Cairnes emphasized, changes in gen- 

 eral prices come through a series of changes in particular levels. 



Nor is the truth of tliis statement overshadowed by the course of the 

 various general index numbers referred to. In all cases some prices 

 have remained stationary and others have fallen while the average is 

 advancing. 



The key to the present price and wage situation seems to me to lie in 

 the following explanation. First there comes an increase in the supply of 

 money media (as already indicated by Prof. Mitchell). Then as this 

 supply increases, the holders of it begin to find its exchange power de- 

 creased here and there according to the demand for particular commodi- 

 ties, or. put in another way, its marginal utility to them, decreased. 

 First, such farm products and food articles as cotton, corn, butter, 



