Methods Used in Constructing New Index

The new index number has been constructed by computing the cost, in terms of the prices at the beginning of each month, of selected commoditities and services, using quantities for each item in proportion to the average yearly consumption per family as determined in the cost-of-living survey. For each class of commodities the list contains a number of representative staple articles ordinarily used, for which dependable and comparable prices can be secured each month in the year.

It must be remembered that the new index shows fluctuations in the cost of a fixed level of living. In this measurement no consideration can be given to varying living planes resulting from changes caused by economic conditions, namely, shifts in income or direct taxation or changes in the ages and numbers of the persons constituting the family group.

After a careful analysis of the 1931 urban census returns relating to family composition, conjugal conditions of heads of families, earnings, racial origin, etc., it was decided to include in the cost-of-living survey only such families as are defined below:

1. All families to have husband and wife living in the home as joint heads with from one to five children.

2. All families to have been completely self-supporting during the survey year, with family earnings ranging from $450 to $2,500 during that period.

3. All families to be living in self-contained dwelling units, not sharing either kitchen or bathroom facilities with other families.

The 1,439 families for which records were collected averaged 4.6 persons, and the majority had 2 or 3 children. Family earnings in many cases were supplemented by other small sources of income, and total family incomes between $1,200 and $1,600 were the most common. There were approximately 2 tenant families to every home-owning family, and about 1 family in 3 operated a motor

car.

In selecting 1935-39 as a base, the Dominion Bureau of Statistics had to take into consideration many types of indexes other than price indexes. Among them were the industrial-production, employment, and car-loadings series. It was not easy to find a recent 12month period which would constitute a widely satisfactory reference level. For both industrial production and prices 1935-39 provided a period of fluctuation "which tended to minimize differences in the base levels of various series relative to earlier periods." Although the last 4 months of 1939 were influenced by the war's outbreak, industrial activity and prices had not reacted sufficiently during those months to affect materially a 5-year average. It was felt that the 1935-39 base was representative not only of pre-war conditions but also provided a reference level for the comparison of average conditions prevailing after the upswing from 1933.

Acting upon a recommendation by the United States Central Statistical Board, the United States Bureau of Labor Statistics has already adopted the 1935-39 base period for its cost-of-living index, and the Federal Reserve Board and Federal Departments concerned with statistical time series also have taken this step or announced their intention of doing so. There are definite advantages in direct comparability between Canadian and United States index-number data.

In constructing the new Canadian index, the average price of each item in the cities included in the computation at the beginning of the month was multiplied by the average quantity purchased per family in 12 months, as disclosed by the survey. The cost of the items in each group of the family budget was then found, and a group index calculated by computing the percent of change from the average cost of the group in the 1935-39 period. The group indexes were then weighted in accordance with their importance in the average group expenditure of the families included in the study, shown in table 1. The groups in the following table are the same as those used in the old index numbers, except that another group "home furnishings" has been added, and the other items in the old group "sundries" have been placed in the "miscellaneous" group.

TABLE 1.-Urban Wage-Earner Family, Annual Living Expenditures in Canada, Year Ending September 30, 1938

1 Directly represented in the index. Other miscellaneous outlay brought total family living expenditure to $1,453.80.

New Indexes

The new index has been computed, by months, back to January 1935, as shown in table 2.

TABLE 2.-New Series of Canadian Bureau of Statistics Cost-of-Living Index Numbers, 1935-40

The items included in the index groups and the basis of pric

reporting are given in table 3.

TABLE 3.-Price Reporting Basis of the Revised Dominion Bureau of Statistics Cost

Table 4 gives cost-of-living indexes from 1913 to 1934, calculated on the new base. For these years home furnishings are included in the

miscellaneous group.

TABLE 4.—Canadian Bureau of Statistics Index Number of Cost of Living, 1913 to 1934 [Former series on base 1926=100 converted to base 1935-39=100]

BRITISH TRADES-UNION CONGRESS, 1940 1

AT THE seventy-second meeting of the British Trades-Union Congress in October 1940, much of the discussion dealt with matters arising out of the European war. The organization had a membership of approximately 4,867,000 at the end of 1939,2 and the total number of delegates appointed to attend the 1940 sessions was 645. Mr. W. Holmes, chairman of the general council, presided over the recent meeting.

A special resolution was adopted reaffirming the resolve of the congress to continue the struggle against the aggressor nations. The measures taken by the general council to safeguard the interests of trade-unionists, to enlist the active cooperation of the organized workers through their unions, and to make the fullest use of the country's manpower and industrial equipment, were approved. Appreciation was expressed of the council's efforts to obtain greater recognition of the trade-unions' right to represent the working people in all matters affecting industry and their conditions of life and labor. Respect was paid to those who, in daily hazard of their lives, have maintained the national defenses and communications against incessant enemy attacks, and sympathy was expressed with the victims of enemy attack. The congress called for the provision of adequate shelters against air raids, for arrangement to meet the needs of those left homeless and without resources in bombed areas, and for the organization by the British Government of arrangements for the safety and comfort of persons forced to seek shelter outside their homes.

The congress called for the repeal of the Trades Disputes and Trade-Unions Act of 1927,3 the consensus being that the unions could best cooperate with and assist the Government if they were unfettered in their methods of functioning. The "restrictive" character of this law is regarded by organized labor as particularly undesirable at this

1 Data are from Great Britain, Ministry of Labor Gazette, London, October 1940; The Land Worker, London, November 1940; and report of Herschel V. Johnson, Chargé d'Affaires a. i., American Embassy. London.

See p. 156 for total trade-union membership, i. e., number affiliated with the Trades-Union Congress plus nonaffiliated members.

For information on this law see the Monthly Labor Review, May and October, 1927.