STABILIZING THE DOLLAR CHAPTER I THE FACTS i. Index Numbers This book aims to show how prices in general can be controlled. A great teacher once said to his students: " Divide the study of any social situation into four questions: What is it? Why is it? What of it? What are you going to do about it? " Accordingly I shall take up, in successive chapters, (1) the actual facts to be explained; (2) the chief causes which explain them; (3) the resultant evils which make a remedy desirable; and (4) the remedy. The present chapter is devoted to the first of these four topics - the facts, as shown by the recorded price movements of history.1 The prices of various articles do not usually move together but scatter or disperse like the fragments of a bursting shell. Yet there is always a definite average movement just as there is a definite path of the center of gravity of the shell-fragments. In order to depict the average movement of prices we must first have some way to measure it. AAbout the...

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