1. It is suggested that those who are especially interested in a study of speculative markets read “Braces’ Organized Speculation,” or “Emery’s Speculation on the Stock and Produce Exchanges of the United States.”
2. The following defense of the functions of the Board of Trade was compiled by Mr. John R. Mauff, the secretary: “The Chicago Board of Trade has exclusive characteristics, indispensable to the welfare of the producer and consumer. It offers the producer a constant and infallible fluctuating market, determined and regulated by the inexorable law of supply and demand. It creates, thru the trading of its large membership, representing the various branches of agricultural and industrial activity, continuous quotations that are collected and distributed generally and without cost to the public. There is thus presented the opportunity for the producer to determine at any time the exact value of his products. A further advantage is that he can dispose of these products at any time by making a future delivery ‘hedging’ contract to suit his inclination, regardless of bad roads or transportation problems. Another benefit is the large and daily open competitive market in which to display his wares before a multitude of buyers simultaneously, obviating the otherwise impossible task of communicating with this diversity of demands by personal effort. Protected at all times by a set of rules and regulations holding its members to a strict accountability for their proper conduct as commission merchants; mandatory for suspension or expulsion for any violation of the ethics of trade. Having at their disposal a variety of ability only to be found in a large membership, insuring in this way proper handling and attention because a strenuous effort is always masterful and resourceful where competition is rife. Dissemination of statistics relating to agriculture; the benefits of terminal elevators equipped with modern apparatus for the proper care of sample grades. For consumers, car shortage and other transportation difficulties productive of business stagnation overcome by the opportunity to purchase for future delivery the raw material where ‘short’ sales of product call for protection. Consummation of contracts possible at all times thru the machinery of a market for future delivery at continuous prices, reliable to the fluctuations of a small fraction—one-eighth of one cent per bushel. In conclusion, and by no means least, the facilities offered for thus establishing value in every part of the United States, with no inequality because of geographical location, and so a death knell to the exploiters of producers and consumers because of this knowledge widely disseminated and so easy of understanding.”
3. The skew curves of supply and demand, as derived by H. L. Moore, in his book on “Economic Cycles,” furnish mathematical proof of this statement so far as corn and oats are concerned.
4. The chart printed in connection with the chapter, “Pork Exports, the Barometer of Corn Belt Prosperity,” gives forty-four years of profit and loss areas per acre of corn in the twelve north central states, the method used being the ratio method as described in the above.
5. It may be argued that the price of hogs determines the price of corn, and that the price of corn determines the price of land. This to a large extent may be true, and yet not interfere with the usefulness of the ratio method for purposes of price judging.
6. The link relative method of finding the normal seasonal variation, as used by Warren M. Persons, in the January, 1919, Review of Economic Statistics, is far more difficult than the method here used, and for our purposes is not worth while.
7. Warren M. Persons, in a footnote on page 35 of the January, 1919, Review of Economic Statistics, expresses the method of ascertaining percentage departure from the secular trend in mathematical symbols as follows: “Let the original series beginning with January be X1, X2, X3, ... Xn, the ordinates of secular trend be O1, O2, O3, ... On, and the adjusted indices of seasonal variation for twelve months be S1, S2, S3, ... S12 per cent, respectively. Then the items for secular trend and seasonal variation are:
X1 − S1O1/O1, X2 − S2O2/O2, X3 − S3O3/O3, ... X3 − S1O13/O13 etc.”
8. These figures are based on seasonal correction factors as follows: January, 96; February, 100; March, 105; April, 104; May, 101; June, 101; July, 103; August, 101; September, 103; October, 100; November, 94; December, 92. These factors are practically the same as those used on page 84.
9. Since the chapter, “Limitations of the Mathematical Method,” was written, it has been discovered that hog receipts at eleven markets are a more accurate indicator of hog prices than receipts at Chicago, and that prices of Connelsville coke are a better indicator of the demand for hogs than bank clearings outside New York City. The multiple coefficient of correlation between hog prices on the one hand and Chicago hog receipts and bank clearings outside New York City on the other hand is .65, whereas between hog prices and hog receipts at eleven markets and coke prices the multiple coefficient of correlation is .70.
10. This is the average as given in the Drovers’ Journal Year Books. It evidently is a weighted average based on varying receipts.
11. This is a simple average and not strictly comparable with the Chicago averages, which are weighted on the basis of varying receipts.
12. Interpolated from Kansas City market, on account of foot-and-mouth disease closing Chicago market.
13. Omaha prices, 1903 to 1907, inclusive; Chicago prices after 1907.
14. Prices for both wheat and corn are taken from the Year Books of the Rosario Board of Trade. Rosario is the Chicago of Argentina. The Argentine unit of weight, the quintal, is taken as equivalent to 3.67 bushels of wheat and 3.936 bushels of corn. The Argentine dollar is taken as equivalent to 42.6 cents. After July of 1918, prices are taken from the International Institute of Agriculture.
15. Flour exports converted into wheat at the rate of four and one-half bushels of wheat to a barrel.
16. These figures, previous to 1917, were taken from charts furnished by Dr. L. D. H. Weld, of Swift & Company. Since 1917, the source has been the Daily Trade Bulletin of Howard Bartels. The top price for the month is used in every case.
17. These figures, previous to 1917, were taken from charts furnished by Dr. L. D. H. Weld, of Swift & Company. Since 1917, the source has been the Daily Trade Bulletin of Howard Bartels. The top price for the month is used in every case.
18. The Milwaukee prices were compiled by Professor F. A. Pearson, of the University of Illinois, from the reports of the Western Feed Bureau.
19. From 1860 to 1890, wages are based on the investigation made by the Department of Labor for the senate committee investigating prices and wages, and reported in Senate Document 1394. Wages from 1890 to 1907 are based on Bulletin 77 of the Bureau of Labor Statistics, and from 1907 to 1913 on unpublished data of the Bureau of Labor Statistics, prepared for the San Francisco Exposition. Figures since 1913 are estimated from reports of manufacturing establishments in New York state, reports of wages paid by the United States Steel Corporation, and reports of the Bureau of Labor Statistics as to wages existing in cotton goods, men’s clothing, lumber, and furniture industries. It is believed that the figures since 1913 are roughly accurate, but that they may have to be revised to make them comparable with the preceding series. Farm-hand wages are derived from the December, 1919, Monthly Crop Reporter of the Bureau of Crop Estimates.