Rising prices mean falling value of gold (and at the same time falling purchasing power), and _vice versa._ [Illustration: FIG.2.INDEX NUMBERS OF PRICES.

The four series of prices here shown begin at different periods; the American in 1840 (Aldrich report 1840-1889 and Bureau of Labor from 1890 on); the English in 1846; the German in 1851; the French in 1857.

We have adjusted each of these series to a base of the average prices for 1890-1899, in accord with the basic period used by the American Bureau of Labor.
The reader must be on his guard against misunderstanding the diagram.
It does not represent the heights of the prices of the different countries compared with each other either at any one date or for the entire period.

For example, the heights of the lines at the year 1860, do not indicate that American prices were lowest and French the highest at that date, or, indeed, tell anything whatever directly on that point.

The various series of prices are compared within themselves, every year with the average of the prices for 1890-1899 in each country, respectively.