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OH. 4 THE PURCHASING POWER OF MONEY 59

I shall use this index as providing a tolerableapproximation to a consumption standard. But itmust be remembered that it was devised by Mr.Snyder for a different purpose, namely, as (what Ishall designate below, p. 78) a Cash Transactionsstandard.

It will be noticed that certain items of expenditureappear, directly or indirectly, in more than one of Mr.Snyder’s component indexes ; but there is no harm inthis, provided the weight given to them in the aggre-gate is not disproportionate. The chief superiority ofMr. Snyder’s index over others, regarded as anindex-number of consumption, lies in the fact thatby bringing in the composite of Wage Payments itgets nearer to making a due provision for the costof personal services.

Mr. Snyder has carried his index for the UnitedStates back to 1875. In the following table 1 the earlieryears are given in terms of quinquennial averages.The index of wholesale prices, which, except in theearly years, is the U.S. Bureau of Labour wholesaleindex, is placed beside it for comparison ; and a thirdcolumn gives the ratio between the two.

This table is of the highest interest to those of uswho have been brought up (and who has not?) tolook on index-numbers of the wholesale type, suchas Sauerbeck’s or the Economist’s, as representing“ the value of money ”. It is evident that in anage of technical progress these index-numbers havetended, except during such an exceptional period

1 Mr. Snyder has published subsequently (Review of Economic Statistics,Feb. 1928) a revised “ Index of the General Price Level ” for the years 1913—1927 compiled on somewhat different lines from the above. This newversion, however, is much less serviceable as a Consumption Index than theversion given above, because—in pursuit of Mr. Snyder’s object which is toproduce, not a Consumption Index, but, as stated above, a Cash-Trans-action Index—it takes account not only of consumption goods and servicesbut also of Realty Values and Security Prices. Thus, whilst Mr. Snyder’snew index may be more suitable for his purpose, his old index is certainlymuch more suitable for mine.