Knowledge that Transforms

HE repeated swings upward and downward which have been characteristic of raw silk prices in the last 25 years have ordinarily occurred at about the same time as similar movements in general business and some time after similar movements in stock speculation. The rough correspondence of raw silk prices to changes in general business is informing, but their lag after speculation has a more practical interest, since, if it persists in the future as in the past, movements of speculation should constitute a useful forecast of major movements of raw silk prices.

the new system of reporting debits to individual accounts in the larger cities of the country, inaugurated by the Federal Reserve Board. These reports, begun in the latter part of I9I8, represent an advance over the previous system of reporting interbank clearings only in that they gave the full amounts of the checks drawn in each of the reporting centers, though, as we shall see, the difference is in degree and not of kind. These rates of turnover were computed according to a formula worked out jointly by Professor Fisher, Professor Kemmerer, and Mr. J. H. Riddle, then of the department, and recorded the number of times which, on the average, a dollar of demand deposits in each of the various cities was paid out; that is, the amount of checks drawn each month against the average of demand

THE year I923 in Europe was one of significant, unmistakable economic progress, save only in Germany and a few minor countriesa progress slackened and modified, to be sure, by the occupation of the Ruhr and its far-reaching consequences, but nevertheless reflecting basic strength, adaptability, and accomplished readjustment which the cursory observer often overlooks or underestimates. This progress has continued in the first half of I924, a six-months period marked by provisional currency stabilization, industrial recovery, and credit stringency in Germany, the dramatic battle of the franc in France and Belgium, and the successful labors of a Committee of Experts toward a working basis for a sensible adjustment of the issues between Germany and her creditors. The present review covers most of the period of the Ruhr occupation, from January I923 to the middle of the current year. Complete statistical data, however, are not available for the second quarter of

HE true proportions of current economic movements are rarely discernible until the movements are viewed in retrospect. The physical volume of production in I923 is a case in point. During the year it was realized, of course, that current output was large, but it was not generally recognized that a new high record for physical production was being set. The high level of output in I923 is most conveniently summarized in index numbers of the physical volume of production. Indexes of this kind are available for the five major divisions of industry: agriculture, animal husbandry, forestry, mining, and manufacture. The indexes for the years I9I9-23 are given in Table A.

N this article, monthly indexes are presented for the output of each of 7 important minerals, various groups of these minerals, and for all groups combined. These indexes, which are adjusted for seasonal influences and long-time trend, make it possible to reach certain conclusions with respect to the cyclical fluctuations in mining activity. Of the minerals comprising our final index, copper, zinc, and iron ore respond quickly and violently to changes in business prosperity; bituminous coal is fairly sensitive to general business conditions, while anthracite coal, petroleum, and silver are much less influenced. The metals, as a whole, exhibit a wider range of cyclical fluctuations than do the non-metals, which are dominated by the fuel group. The final index of the volume of mining fluctuates in sympathy with other volume series published by the Harvard Economic Service, such as the index of trade and the index of the volume of manufacture.' The similarity of movement is shown in Charts i and 2.