COST OF GOVERNMENT IN MASS. 



181 



The Significance of the Increase in Expenditures 



While the increase in expenditures has been large, it has been shown that 

 the growth of population together with the change io prices has exercised con- 

 siderable influence on this increase. The effect of these factors is shown by 

 index numbers in Table 8 and Chart 6, where total and per capita expenditures 

 for each year have been reduced to percentages of expenditures in 1910. The 

 index of total expenditures for 1926 is 292. Allowing for the increase in popu- 

 lation, the per capita index in 1926 is 234. 



CHART 6. Public Expenditures, Total and per Capita, Actual and Deflated by the 

 Index of Wholesale Prices, 1910-1926. 



(Expressed in Index Numbers ■with 1910 as the Base.) 



INDEIX NUriBLR 



1910 = 100 



350 



300 



250 



200 



iQO 



926 



These figures make no allowance for the increase in prices. If the Bureau 

 of Labor Index of Wholesale Prices, converted to a 1910 base, is used as a 

 measure of the changing value of the dollar, expenditures may be stated in 

 terms of dollars with a constant value, their value in 1910. On this basis, total 

 expenditures in 1926 were only 93 per cent higher than in 1910, and per capita 

 expenditures gained only 55 per cent in the 17-year period. 



From the chart it will be noted that during the war years the increase in ex- 

 penditures did not equal the increase in prices, and for five years expenditures 

 in deflated dollars were lower than in 1910, both in total and per capita. Tax 

 payers were apparently getting the same service as before, but paying less for 

 the service in terms of purchasing power. 



