the interests of every member of the community.

General prices are conveniently compared from one time to another
through the use of index numbers. An _index number_ of any article is
the per cent which its price at any certain date is of its price at
another date (or of the average for a series of prices) taken as a
base or standard. Thus if the average price of cotton in the base year
were 10 cents (taken as 100) and the price rose to 12 cents, the index
number would be 120. _A tabular index number_ is the per cent which
the price of a selected group of articles at any certain date is of
the price of the same group of articles at a date which has been taken
as the base.[4]

The principal index numbers of the leading countries are here shown.
The fact that from 1862 to 1879 inclusive prices in the United States
were expressed in an irredeemable paper standard makes comparisons for
that period misleading. A better idea is obtained by using as the base
for each of the several series, the average of prices in each country
for the years 1890 to 1899.

Sec. 5. #Gold production and monetary legislation, 1850 to 1879#. The
unprecedented increase in gold production between 1849 and 1853, and
the continuance of production in volume about four-fold as great as
that of the decade 1840-49 was reflected at once in a rise of prices.
This was a period of prosperity in business culminating in the
crisis of 1857 (felt more or less in all the leading countries). This
prosperity accelerated the effect of increasing quantities of the
standard money. Credit was stimulated and the rate of circulation and
the efficiency of money were increased. Prices rose to a temporary
maximum in 1857 and then fell as a great international financial
crisis occurred. The great new supplies of gold had been readily taken
("absorbed") into the monetary circulation of the world, to meet
the needs of rapidly growing commerce and industry. In the European
countries,[5] prices in terms of gold, tho fluctuating somewhat, kept
at about the same level from 1860 to 1870. The years 1871 and 1872
were very prosperous and showed rapidly rising prices which reached a
maximum in 1873, when a financial panic occurred.

In that very year, just as the gold production for the first time
since 1851 had fallen below $100,000,000, several notable changes in
monetary legislation were made which made gold more important in the
circulation of a number of countries.

In 1873