Mr. HINRICHS. I will be here at your convenience, Senator. Senator TUNNELL. Very well. We will recess until tomorrow morning at 10 o'clock. (Whereupon, at 12:01 p. m., an adjournment was taken until 10 a. m., Thursday, September 27, 1945.) EXHIBIT A UNITED STATES DEPARTMENT OF LABOR Frances Perkins, Secretary BUREAU OF LABOR STATISTICS Isador Lubin, Commissioner (on leave) A. F. Hinrichs, Acting Commissioner DESCRIPTION OF THE COST OF LIVING INDEX OF THE BUREAU OF LABOR STATISTICS (Prepared in the Prices and Cost of Living Branch Aryness Joy Wickens, Chief, December 1, 1943) The Bureau of Labor Statistics cost-of-living index is designed to measure changes in the prices paid for goods and services by city families wth moderate incomes. It is a price barometer, not a measure of changes in the total amount ¡ spent for family living. The cost-of-living index was first issued in February 1921. It covers prices and rents as of the 15th of each month. The final national index is usually published about the 15th to the 20th of the following month. Thus the index for October, covering prices as of October 15, was completed by November 20. The index measures the changes in prices of food, clothing, rent, fuel, housefurnishings, transportation, personal services, and a variety of miscellaneous goods and services purchased by families of moderate income. CITIES COVERED BY THE COST OF LIVING INDEX The national cost-of-living index represents cities of more than 100,000 population. It is often referred to as a "34 city index." In fact, however, for 4 months of the year (March, June, September, and December) the index is based upon changes in food prices in 56 cities and changes in prices of all other important goods and services in 34 cities. For the other 8 months of the year the index is calculated on the basis of food prices in 56 cities and prices of other commodities and services, with the exception of rents, in 21 cities. Rents, which in most cases have changed slowly since OPA rent control became effective, are obtained quarterly. The cities covered are listed below: Atlanta Buffalo Thirty-four large cities1 Jacksonville Pittsburgh EFE Cleveland ! Detroit Houston Indianapolis New Orleans Norfolk Washington, D. C. 1 Indexes are prepared each month for the cities which are italicized, and quarterly for the other cities listed. These 56 cities include 81 percent of the population of American cities of more than 100,000 population and the 34 large cities over 72 percent.2 The map (map 1) shows that these cities are concentrated in the large industrial areas. There are 11 States that are not represented in the national index, as well as a number of industrial areas made up of small communities, such as the coal-mining, textile, and metal-mining centers. OTHER CITIES SURVEYED FOR CHANGES IN THE COST OF LIVING BUT NOT INCLUDED IN THE NATIONAL INDEX As a part of its recently expanded program to collect cost-of-living data for the use of war agencies, the Bureau also collects information on changes in retail prices and the cost of living in other communities. Local cost-of-living indexes which are not incorporated in the national index have been compiled for 32 additional cities and are estimated from partial data for another 7, making 73 in all.. Reports are not available as promptly for these cities as promptly as for those in the national index. The additional cities include 20 small cities selected to be generally representative of all cities of 5,000 to 50,000 population, and 12 war production centers, both large and small, in which the impact of war activities on the prices paid by consumers has been important. They are listed below: 2 Of the 34 cities, 4 had a population of less than 100,000 in 1940-Manchester, N. H., Mobile, Ala., Portland, Maine, and Savannah, Ga. With the possible exception of Manchester, these are now above 100,000, due to wartime expansion. Of the 56 food-survey cities, 8 in addition to these 4, were under 100,000 population, and 1 was under 50,000 in 1940. They were included in order to obtain better geographical representation. Indications are that price changes in the cities of 100,000 population and over are quite similar to those in cities of 50,000 to 100,000 population; and so, in combining city indexes, account has been taken in the weights of cities of this size surrounding the large cities. These cities are also included in the 56 cities in which the Bureau collects food prices each month. Estimates of changes in the cost of living are also made quarterly for the following seven cities for which current figures on foods, rents, and fuels alone are collected: Dallas, Tex. Knoxville, Tenn. Little Rock, Ark. Louisville, Ky. New Haven, Conn. Peoria, Ill. Rochester, N. Y. Rents are now being obtained in many cities at the request of the Office of Price Administration for use in evaluating its rent program. GOODS PRICED FOR THE COST-OF-LIVING INDEX A typical bill of goods and services that families buy is priced for the index. It has been constantly adjusted since March 1935 for necessary changes that have resulted from normal market developments as well as from the rapid wartime changes in consumers' goods available for civilians. Staple lines, many of which are still available, are the principal components of the index both in peacetime and in wartime. The list of goods priced for the index includes 183 articles widely bought by workers' families and esential services which they use. No luxuries are included. For many goods a number of different grades and qualities are priced, as, for example, in September 1943, when the index included prices for 342 different articles and qualities of articles. The selection of articles to be priced was made on the basis of an extensive study of actual expenditures of over 14,000 wage earners' and clerical workers' families conducted by the Bureau in 1934-36. Each family listed the goods it bought, including detailed purchases of food for the previous week, and gave the amounts spent for each class of purchases. Information was also obtained on income and on taxes and savings. Since it obviously would be impossible to price everything consumers buy, a representative list was selected for the. cost-of-living index. All essentials commonly bought by city families were included, and other goods were selected on the basis of the general demand for them and their importance in the total family budget. Where any one of a number of articles in a given group, such as women's clothing, was chosen as representative of the group as a whole, selection was also based on the extent to which the price change of the particular commodity in the past had been typical of changes for the entire class which it represented. Thus, prices for women's cotton dresses are used to represent changes in the prices of cotton dresses, aprons, and coveralls. Coil bedsprings, whose prices usually move in approximately the same manner as the prices of other bedsprings, metal beds, and cots, were chosen to represent this entire group. Sheets, towels, and curtains were selected to represent other cotton household textiles, 1. e., tablecloths, bedspreads, couch covers, and dresser scarfs. Changes in prices for adjusting and relining brakes, overhauling and repairing clutches, and for lubricating chassis of automobiles were chosen to represent changes in the cost of general repairs and maintenance of an automobile. Foods priced. The list of foods for which prices are secured includes all staple foods, such as bread, milk, butter, potatoes, cabbage, various cuts of meat, canned fruits and vegetables, and a few fresh fruits and vegetables, fish, and poultry. This list was not changed from March 1939 until March 1943, when seven foods were added, including hamburger, liver, rolled oats, and certain other foods which were bought in larger quantities because of rationing. Restaurant meals are not priced. For a complete list, see table II, appended. U. S. Department of Labor, Bureau of Labor Statistics Bull. No. 638, Money Disbursements of Wage Earners and Clerical Workers, 1934-36, Summary Volume. The list of foods now included in the cost-of-living index is given below: Clothing. The clothing that is priced includes the customary purchases of the ordinary city family, such as men's suits, overcoats and topcoats, work clothing. and shirts; women's dresses, skirts, hats, and coats; shoes for men, women. and children; and various accessories. The only important groups not covered are infants' clothing and some kinds of boys' and girls' clothing. Housefurnishings.-Changes in prices of furniture and housefurnishings are measured by the more important furnishings, such as living-room and diningroom suites, studio couches, mattresses and bedsprings; stoves, refrigerators. and washing machines; sheets, blankets, towels, and curtains; and certain china and glassware. So little furniture and equipment is now available in the market that many articles formerly included have been dropped from the list because they cannot be purchased now by the average family. Fuel and light.-All kinds of fuel are priced, with particular emphasis on fuels that are locally important. Thus, in addition to coal, fuel oil, and kerosene, stove and fireplace wood is priced in New England, in the Pacific Northwest. and in other regions where it is widely used; and sawdust is priced in Seattle, Wash., and Portland, Oreg. Typical bills for gas and electricity are obtained in all the large cities. Ice for household use is also priced. Rents. The rental index now shows changes in the average rental bill for all types of family dwellings occupied by tenants. Boarding houses, rooming houses, or light-housekeeping rooms are not included. Until the autumn and winter of 1942, information on rents was collected by the Bureau from rental management agencies, such as real-estate firms and trust companies. Since that time, in order to get more accurate figures, information has been obtained directly from tenants in all of the cities included in the Bureau's index. Miscellaneous goods and services.-This group includes services, transportation, recreation, and a variety of household supplies. Transportation is represented by changes in bus, streetcar, and railroad fares and the cost of automo bile maintenance. Before Pearl Harbor, changes in prices of automobiles and tires were also included. Generally used services like laundry and dry cleaning, and personal services such as haircuts for men and haircuts and permanent waves for women, are included. Ordinary medical and dental charges-for example, the cost of an office and a house visit, a tonsillectomy, and prices of most commonly used drugs and prescriptions—are obtained. Changes in the cost of local admissions for movies, telephone rates, and the prices of daily newspapers are also part of this group. CHANGES SINCE THE OUTBREAK OF THE WAR It has always been the Bureau's policy to keep the list of articles priced for The cost of living index as nearly up to date as possible. Since the outbreak of the war, with the great change in kinds of goods on the market for civilians, it has been necessary to compute the index without many articles which had formerly been priced. Most important are automobiles and tires; some furniture and household equipment, such as washing machines and radios; and silk hosiery and other articles made of silk. New wartime substitutes, including rayon hosiery and ice refrigerators, have been added whenever they were generally available. The following table gives a record of the adjustments made in the list of articles since Pearl Harbor, in order to keep the index in line with market developments. These adjustments were made in each of the 34 cities at various times, as the goods actually disappeared from retailers' stocks. Mar. 15, 1942 Dec. 15, 1942 Dec. 15, 1942 June 15, 1942 Mar. 15, 1943 Rayon yard goods and rayon slips.Dec. 15, 1942 Used tires and tubes dropped from index in 5 cities in which they were not available for purchase. Used tires and tubes dropped from the index in all other cities. Weight increased 10 percent in index. Weight reduced by one-half in eastern seaboard cities and by one-third in rest of country. Gasoline and oil weight reduced by an additional 25 percent in cities outside eastern seaboard. Gasoline weight reduced by 10 percent in cities of Weight increased in all cities in accordance with re- Weight reduced one-third in limitation area defined Dropped from entire index. Dropped from city indexes, as stocks have been exhausted in 30 of the 34 cities. Dropped from city indexes, as stocks have been exhausted in all of the 34 cities. Dropped from city indexes, as stocks have been exhausted in 30 of the 34 cities. Dropped from city indexes, as stocks have been exhausted in 24 of the 34 cities. Do. Dropped from city indexes, as stocks have been exhausted in 11 of the 34 cities. Do. Dropped from city indexes, as stocks have been exhausted in 6 of the 34 cities. Dropped from city indexes, as stocks have been exhausted in all of the 34 cities. Added to all city indexes. Do. Dropped from city indexes, as stocks have been exhausted in all of the 34 cities. Weights increased as silk yard goods and silk slips were dropped. Weights for innerspring mattresses dropped from city indexes, as supplies have been exhausted in all 34 cities. Cotton felt mattresses priced wherever available (22 cities). Source: Monthly Labor Review, July 1943. Faith M. Williams, Bureau of Labor Statistics' Cost of Living Index in Wartime. |