Page:Stabilizing the dollar, Fisher, 1920.djvu/208

154 the adjustment should be so delicate and prompt as between countries whose centers average hundreds of miles apart and whose trade currents are obstructed by high tariffs is not only surprising but extremely significant.

If this estimate of a month and a half be near the truth, a monthly or, at most, a bi-monthly adjustment of the index number would usually give sufficient time for any adjustment to make itself felt in the index number before the next adjustment was made.

Some such period of waiting for the effect of one adjustment to work itself out before another adjustment is made is advisable so as to avoid, as far as possible, occasional cases in which the new adjustment might prove to have been in the wrong direction and need to be recorrected later.

(6) In my book, the Purchasing Power of Money (Chapter X and Appendix to Chapter X), I have discussed at length the question of the best formula for calculating an index number. The merits of forty-four formulæ are there considered. On the whole, I favor a weighted arithmetical average like that adopted by Dr. Meeker, Commissioner of Labor Statistics, and used in the index number of the Bureau of Labor Statistics. This system was used in calculating the special index number of "responsive" commodities to which I have already referred.

As this last-named index number is the one I would, at present, most favor, it is given on the opposite page and the regular index number of the Bureau of Labor Statistics is given for comparison.

4. Selection of the Par

We may distinguish three classes of contracts, past, present, and future, i.e. those both made and fulfilled in the past, those made in the past but to be fulfilled in the future, and those to be both made and fulfilled in