The numerical importance of the criticisms indicated may be seen by computing the number for Dec. 1920 with the following alterations: suppose that the modification of diet (margarine instead of butter, decrease of sugar and eggs and increase of other foods) reduces the food index to 260, that the increase in clothing cost is half that shown (as indicated by the Cost of Living Committee for 1918) and the index is 200 instead of 305, and that rent accounts for 20% of all expenditure, food for 50% and sundries for 10%, instead of 16, 60 and 4% respectively, then the index number would be 225 instead of 269. This is, perhaps, an extreme hypothesis, but it has been suggested (Bowley, Prices and Wages in the United Kingdom, 1914-1920, p. 75) that a standard equivalent on the whole to, but modified in detail from, that of 1914 might have been attained throughout by an increase of expenditure equal to four-fifths of that officially stated (100 + 4/5 of 169 = 235 in Dec. 1920).
Other Countries
(a) Cost of Food.—The experience of other countries has been similar to that of the United Kingdom both in the dates of increase and in the difficulties of satisfactory measurement. Table V contains in summary form the index numbers showing the movement of food prices in all the countries which are known to publish official figures based on 1914 prices. Except in Belgium, where the index numbers are the simple average of prices of selected commodities, the measurement is made on the same method as in the United Kingdom and based on the expenditure found from a collection of working-class budgets, though in some countries the number of such budgets is very small. In some cases, noted in the sequel, some changes in commodities are introduced, and in others alternative measurements based on actual expenditure at different dates are given. These numbers are summarized from time to time in the Labour Gazette (London), the Labor Review (Washington), in the International Labour Review (Geneva), and in the Monthly Bulletin of the Supreme Economic Council; they are of course also to be found in the official publications of each country.
Table V.
Index Numbers of Retail Prices of Food (based on the official statistics of the various countries).
(In every case the prices used are in the currency of the countries in question.)
| 1914 July |
1915 July |
1916 July |
1917 July |
1918 July |
|
|
1921 Jan. | |||||||||||
| United Kingdom* | 100 | 132 | 161 | 204 | 210 | 230 | 217 | 235 | 262 | 263 | ||||||||
| France (Paris) | 100 | 122 | 132 | 183 | 206 | — | 261 | 290 | 373 | 410 | ||||||||
| France (other towns) | 100 | 123 | 142 | 184 | 244 | 248 | 293 | — | 380* | 429 | ||||||||
| Italy (Rome) | 100 | 95 | 111 | 137 | 203 | 259 | 206 | 275 | 318 | 367 | ||||||||
| Italy (Milan) | 100 | — | — | — | 325 | 309 | 310 | 412 | 445 | 573 | ||||||||
| Switzerland* | 100 | 119 | 141 | 178 | 222 | — | 250 | — | 232 | — | ||||||||
| Belgium | 100* | — | — | — | — | — | — | 396 | 459 | 493 | ||||||||
| Netherlands (Amsterdam) | 100* | 114 | 117 | 146 | 176 | 189 | 204 | 197 | 210* | 199 | ||||||||
| Denmark | 100 | 128 | 146 | 166 | 187 | 186 | 212 | 251 | 253 | 276 | ||||||||
| Sweden | 100 | 124 | 142 | 181 | 268 | 339 | 310 | 298 | 297 | 283 | ||||||||
| Norway | 100 | — | 160 | 214 | 279 | 279 | 289 | 295 | 319 | 334 | ||||||||
| Spain* | 100 | 107 | 114 | 136 | 162 | 168 | 180 | 193 | — | — | ||||||||
| United States | 100 | 98 | 109 | 143 | 165 | 181 | 186 | 197 | 215 | 169 | ||||||||
| Canada | 100 | 105 | 114 | 157 | 175 | 186 | 186 | 206 | 227 | 195 | ||||||||
| British India (Calcutta) | 100 | 108 | 110 | 116 | 121 | — | 155 | 153 | 170 | — | ||||||||
| South Africa | 100* | 106* | 114* | 127* | 129* | 135 | 139 | 177 | 197 | 172 | ||||||||
| Australia | 100 | 131 | 130 | 126 | 132 | 140 | 147 | 160 | 194 | 181 (March) | ||||||||
| New Zealand | 100 | 112 | 119 | 127 | 139 | 145 | 144 | 158 | 171 | 174 (Feb.) | ||||||||
*Notes.—United Kingdom.—The figures relate to the first day of the month following that named.
France, other towns.—The figures include fuel and light; the number 380 relates to June not July 1920.
Switzerland.—The numbers relate to June not July in each year.
Belgium.—The base is April 1914.
Netherlands.—In some accounts 217 is stated for July 1920 instead of 210; the basis in 1914 is the average for the year, not the month of July.
Spain.—The July figures are for the average April to Sept. and the Jan. figures the average Oct. to March each year.
South Africa.—The figures for 1914 to 1918 are the averages for the years, not July only.
Though the movements are by no means uniform, the rise is universal, and, except for a temporary break after the Armistice, continuous in nearly all countries till at least July 1920.
The break in the rise occurred at various dates after June 1920, as shown by figures in Table VI.
Table VI.
Index Numbers of Retail Prices of Food.
(The level of 1914 is taken as 100.)
| 1920 | United States |
Canada | United Kingdom* |
Paris | Switzerland (13 towns) |
Rome | Amsterdam | Norway | Sweden | Australia | South Africa |
| June | 215 | 228 | 258 | 369 | 228 | 325 | 204 | 311 | 294 | 187 | 194 |
| July | 215 | 227 | 262 | 373 | 235 | 318 | 210 | 319 | 297 | 194 | 197 |
| Aug. | 203 | 221 | 267 | 373 | 239 | 322 | 212 | 333 | 308 | 194 | 196 |
| Sept. | 199 | 215 | 270 | 407 | 238 | 324 | 217 | 336 | 307 | 197 | 195 |
| Oct. | 194 | 214 | 291 | 420 | 247 | 341 | 218 | 339 | 306 | 192 | 197 |
| Nov. | 189 | 206 | 282 | 426 | 246 | 220 | 342 | 303 | 186 | 196 | |
| Dec. | 175 | 200 | 278 | 424 | 235 | 375 | 208 | 342 | 294 | 184 | 188 |
| 1921 | |||||||||||
| Jan. | 169 | 195 | 263 | 410 | — | 367 | 199 | 334 | 283 | — | 172 |
| Feb. | 155 | 190 | 249 | 382 | — | 376 | 199 | 308 | 262 | — | 165 |
| March | 153 | 178 | 238 | 359 | — | 386 | 199 | 300 | 253 | 181 | 160 |
| April | 149 | 172 | 232 | 328 | — | 432 | 188 | 300 | 247 | — | 156 |
| May | 142 | 155 | 218 | — | — | — | — | 292 | 237 | — | — |
*Figures for beginning of following month.
The prices are of course strongly affected by the relative value of the currency in the countries, and some indication of the effect may be seen (Table VII) by converting them to a gold basis by means of the exchange on New York. July 1920 is taken as being near the date of maximum prices. Corresponding figures are also given for Jan. 1921.
Table VII.
| July 1920 | Jan. 1921 | |||
| Food index number |
Exchange on New York as percentage of parity |
Deduced index number |
Deduced index number | |
| London | 258 | 76.6 | 198* | 210 |
| Paris | 373 | 39.4 | 146 | 151 |
| Rome | 318 | 27.6 | 88 | 71 |
| Amsterdam | 210 | 85.5 | 180 | 168 |
| Stockholm | 297 | 79* | 235 | 230 |
| Switzerland | 235 | 88* | 207 | 193 |
| Australia | 194 | (approx.) 77 (approx.) | 149 | 142 |
| United States | 215 | 100 | 215 | 169 |
*Obtained by converting through London, thus: 258 × 76.6 ÷ 100 = 198.
Thus if an American had come to London with $198 in July 1920 he could have converted them into as many £ currency as would buy as much food as $100 would have purchased in July 1914. In Rome he would have needed only $88.
