WAGES AND THE COST OF LIVING.
I To THE EDITOR OP THE " SPECTATOR." I SIR,—You announced a fortnight since a paper on " Wages and Prices" which Mr. Hooker had prepared for the Statis- tical Society. This paper is now in the journal of that Society and is a monumental work, recalling the late Sir Robert Giffen at his best. Few of us were, I think, aware that Foreign Departments are establishing official "Index Numbers," and are thus checking and completing the admirable work here of Mr. Augustus Sauerbeck. All this is set out with much elaboration by Mr. Hooker. Your columns are not quite the place in which to analyse " index numbers," but in broad outline Mr. Hooker's paper will reduce the general anxiety. Food prices for this year of drought are abnormal, but eliminating the past six months the world-wide rise of prices is seen to be dragging upward wages almost commensurately in England and abroad. Thus the index number for wages (U.K.) for the average of the period 1895-99 was 97, and for 1910 it was 107. Retail food prices had in the same period advanced from 96 to 111. Thus the wage earner is very little the worse for the rise of prices, and indirectly no doubt that rise through the " boom" it created in trade absorbed the unemployed. In France the position is really remarkable, and no doubt the official figures which are most elaborate, will start an active controversy, Wages in France for the above period have risen steadily from 98 to 110, while retail food prices have fallen from 104 to 96. The United States index numbers are not unfortunately brought up to date ; there, however, the advance both of wages and of food prices has been unprecedented, and wages have advanced to the full measure of prices, while hours arc shorter. But, what is of all the most important, the general advance in the price of all commodities as shown by the index numbers is much greater in the case of the United States than in the United Kingdom. Average prices here did not rise appre- ciably (diagram five) between 1892 and 1910. In the United States the rise, especially since 1896, has been enormous. It may be safely reckoned at 40 per cent. This being the case as between England and America, England has been a bad country for America to sell to, but America, on the other hand, has been a great and improving market for our exports. Thus Mr. Hooker's paper throws a calcium light on the root cause of the great anxiety in Wall Street for the past four years as to its exchange on Europe, and only that our exporters instead of bringing their cash balances here have been shifting vast sums owing us by New York into Canadian invest. ment, the trouble in Wall Street would have been much more acute. I have heard it suggested in New York that prices there were higher than the "international level," and this view which now stands revealed was regarded as fantastic—as though the level of the ocean had risen on that side! Enough to suy Mr. Hooker's contribution is most valuable and timely. It is a pity perhaps he occupied a couple of pages with Mr. Cassers " curve " in the Tidehrift, which is a mere rainbow
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