e rates to price changes in accordance with the
following policy. It need hardly be explained that other considerations
besides the fact of price change may enter into the award, as the
adjustment of wages to price change is merely one part of a larger
policy.

The measure of price change by which the central authority should be
guided--that is, the approved index number,--should be the movements of
the index number of the prices of all important commodities produced
within the country; this index number to be so weighted as to give a
defined importance (50 per cent. suggested) to the prices of those
classes of foodstuffs, clothing, housing accommodations and other
commodities, upon which the wage earners spend the larger part of their
income. It will be noted that this measure of price change is the same
as that used in the adjustment of wages prescribed under the living wage
policy. And, as was recommended in the discussion of living wage policy,
so it is recommended here, that adjustments should not be undertaken
unless the index number of prices has moved at least 5 per cent., and
that adjustment should not be more frequent than twice a year.

In regard to the actual policy of adjustment to be pursued in periods of
rising and falling prices, here also, save in one important respect, the
same policy that was sketched out for living wage adjustments should be
followed.

3.--The one point in which it may be advisable to depart from the policy
laid down for living wage adjustments is in regard to the _amount_ of
wage change that should be undertaken for movements in the price level.

In the earlier discussion it was suggested that wherever wages were
adjusted to price changes, the adjustments should be on the basis of
equal percentages. If this basis were to be used in adjusting the wages
of all other groups of workers it is evident that during periods of
changing prices there would be a different set of wage differentials for
every position of the price level. And, furthermore, during periods of
rising prices, the lowest paid classes of workers--those who could do
least to meet the rise in the cost of living by changing their
consumption habits--would receive the smallest wage increases.

A great diversity of practice characterized the attempts at adjustment
which were made during the period of rapid price increase inaugurated by
the war. No two agencies of adjustment used the same basis. Possibly the
most wides