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 of the industrial companies. All the years following 1908 are likely to show a greatly increased volume of business in practically any field of commerce or industry. Because 1908 was selected as unity in Fig. 94, the reader would be justified in feeling that the increased amount of revenue in the years following 1908 might have come solely from the improvement in general business conditions, without any assistance whatever from ability in managing the railroad. If the betterment in the general prosperity of the country were great enough, it might even be possible to show in Fig. 94 a large increase in operating revenue due only to the general improvement in business conditions and in spite of reduced efficiency in the operation of this individual railroad, considered per se. It is not intended here to cast any reflections upon the managing ability on the railroad in question. The only object in mentioning the matter at all is to point out the fact that the use of the year 1908 as unity puts the road unnecessarily under suspicion of attempting to mislead the public.

Annual Report of the Wheeling and Lake Erie Railroad, 1912

Fig. 94. Improvement in Economy of Operation of the Wheeling and Lake Erie Railroad, 1908 to 1912

It will be noticed from the upper left-hand corner of the chart that the year 1908 is taken as unity. 1908 was a year of great business depression. As business conditions naturally improved in the years following 1908, there could be a legitimate question in the reader's mind whether the better showing of the railroad is due to better management or to the increase in the general prosperity of the country

In any chart where index numbers are used the greatest care should be taken to select as unity a set of conditions thoroughly typical and representative. It is frequently best to take as unity the average of a series of years immediately preceding the years for which a study is to be made. The series of years averaged to represent unity should, if possible, be so selected that they will include one full cycle or wave of fluctuation. If one complete cycle involves too many years, then