T HE various trade and production indexes which have been compiled during recent years are valuable in furnishing students of economic history with a continuous record of the fluctuations of general business. To mention a few such indexes, Colonel Leonard Ayres has compiled an index of general business extending backto I790; the Index of Industrial Production and Trade prepared by Dr. Warren Persons covers the years since I875; and the American Telephone and Telegraph Company has a compositeindex of business activity from I877 to date. In the case of these averages, as well as of some others that might equally well have been mentioned, the purpose has been to secure a continuous record of the general economic situation in the United States. By the use of one or more of these compilations the relative magnitudes of cyclical movements may be compared. It is to be assumed that the element of long-time growth has been carefully measured 'and eliminated, and therefore, in order to measure the relative severities of depressions, or the relative intensities of booms, it should theoretically be necessary only to compare (in some manner or other) the displacements from the normal line. Such an approach, however, lacks objectivity, for the choice of a line of trend may be based in part upon the reasonableness of the degree of 'prosperity and depression that it indicates. The determination of the secular trend of an economic series is never wholly a precise mathematical operation; moreover, the fixing of the normal level for a given year is probably somewhat more dependent upon personal judgment than is the determination of the normal rate of increase. It seems desirable, accordingly, to utilize a more direct approach to the problem of measuring the amplitude of cyclical movements in this country. An examination of the size of the fluctuations occurring in the most important series of business data should throw some light upon the character of cyclical down-turns, and should prove useful in supplementing the story presented by the several composite indexes. Such an examination, if based upon monthly items, would be greatly handicapped by the scarcity of series extendingback more than fifty years. For annual series, on the other hand, the amount of available material is large. It is not necessary here to recount the advantages and disadvantages involved in the use of annual data. It is perfectly clear that for certain kinds of analysis yearly figures are far inferior to monthly. In particular, they are not satisfactory for the determination of time relationships among series in cases when the lags are in terms of months rather than of years. The conclusion, however, that annual data cannot serve a useful purpose in recording the magnitudes of cyclical movements does not seem warranted. On the contrary, it appears likely that any business decline important enough to be recognized by economic historians would be definitely noticeable in the annual record of almost every series relating to important business activities. This should be equally true whether the valley of the depression was shallow and wide, or deep and narrow. During periods of rapid growth, of course, it might happen that a mild down-turn would be reflected merely in the failure of the series to achieve more than a part of 'its full normal year-to-year increase. For the' measurement of such minor declines, annual data may often prove less dependable than monthly items. On the other hand, the use of yearly figures brings certain definite advantages in the measurement of cydes over a-long period of years. It makes available a much larger number of series upon which the investigator may base compan'sons. ' In addition, it automatically eliminates the problem of determining seasonal movements, and thus increases the objectivity of the results. Our choice of the period to be examined was based in large part upon economic considerations. From the point of view of American economic history, the years since I870 possess a sufficient amount of economic homogeneity to render appropriate the comparison of business conditions and tendencies. Numerous comparisons of the present situation with that in the seventies and in the nineties, revealing considerable similarities, have been made. Comparisons with the panics of I837 and of I857 are much less frequent, and are made with the realization that the United

T HE purpose of this study is to give a general view of the major changes which have taken place in the composition of our laboring force during a period when striking economic changes have occurred in the United States as a whole. The attempt has been made to secure roughly homogeneous occupational groups from the data furnished in the decennial censuses from I850 to I920. The character of these data precludes the obtaining of rigorously demonstrable conclusions; yet the decisiveness and persistence of certain of the tendencies are such as to warrant several interesting inferences. Economic theory indicates that, with the development of a nation along industrial lines, a larger proportion of the population tends to be engaged in the rendering of services, and a smaller proportion in the production of goods. Statistical verification of this tendency has been sought in the present investigation, and the results, though derived from data highly unsatisfactory in many respects, do furnish a definite confirmation of economic theory upon this point. It must be granted at the outset that the present paper can endeavor to utilize data from but a small fraction of the numerous occupational tables. Many other lines of inquiry are suggested from an examination of these decennial reports. The student of social statistics might find greater interest in examining the changes in the relative numbers of women and children engaged in the various gainful occupations. The economic historian might prefer to make international comparisons which would indicate the stages of development of our nation from an industrial point of view. These lines of departure, as well as many others, would undoubtedly prove of interest, but lie wholly beyond the present attempt to give a broad picture of changes in the main groups of our working population for the past three quarters of a century. In I850 the first effort was made to enumerate comprehensively the workers engaged in the various lines of industry. Prior to that year, there had been fragmentary compilations (as early as I820), but nothing which could readily be joined to the more complete data in later reports. From the middle of the nineteenth century onward, however, it is possible to divide the gainfully employed population into six main groups, with sufficiently clear lines of demarcation to avoid serious errors in classification. These six groups, which will be discussed in much more detail below, are: primary production (including farmers, miners, etc.), manufacturing production, trade, transportation, professional service, and domestic and personal service. Continual changes in the compilation of the census material render the computation of such group totals very difficult. For example, the I850 census reported only males over the age of I5 in the various industries; while that of i860 reported both males and females over the age of I5, with no indication of the proportions of the sexes. In I870, both men and women were included for the ages I0-I5, I6-59, and 6o and over. So far as the main age groups are concerned, the I870 model has been followed for subsequent reports. In other respects, however, modifications have continued to be made. Regularly, from one decennial period to the next, there are certain changes in the industrial organization which call for the addition of new categories, and lead to the abandonment of others. In addition, there have been two major revisions of the arrangement and form of the occupational reports, the first in I870, and the second in I9g0. These changes, while improving greatly the utility of the reports, seriously hinder the obtaining of homogeneous groups, and, indeed, in many cases are of such a character that no statistical operation can furnish results which are assuredly trustworthy. A process of chaining has been employed in bridging these years in which sweeping changes in form have been made, and it appears that despite the many uncertainties involved in the handling of individual occupations, the main results give definite indication of the more significant and persisting changes. At first thought, one might suppose that all census reports are highly comprehensive and reliable statistical compilations. Many enumerations are necessarily fragmentary and inexact be-

IN no other country in the world is it possible to keep so closely in touch with current monetary developments as it is in the United States. The reports of the condition of the reserve banks and of the member banks furnish a fertile field of research for the economic statistician. Although much has been done in the interpretation of the forces at work in the banking system, it is safe to say that much remains to be done, and important additions to banking theory will arise from further study of the interactions within our complex financial mechanism. The statements for the member banks which report weekly furnish promptly available data for a group of banks with assets including about three-fifths of the total assets of all member banks. Since all member banks in turn comprise about 6o per cent of all banks in respect to total assets, it will be seen that reporting-memberbank figures are a 3 5-40 per cent sample of similar items for all banks. The reporting member banks are not a random sample, but their reports furnish a trustworthy picture of changes in the credit situation, and, since they are available weekly, have an obvious advantage over the reports for all member banks and for all banks. Although their movements should occasionally be checked against those of more comprehensive aggregates, one may depend upon reportingmember-bank data to furnish a good view of current developments in the credit situation. The solid lines on Charts i and 2 show total loans and investments of all member banks and of reporting member banks respectively for the period I922 to date, and it is apparent that the fluctuations are simi ar. For a measure of the amount of credit expansion in recent years it is possible to look either to the asset or to the liability side of the balance sheets which furnish our current banking statistics. Since reserves are computed as a percentage of deposits, it might seem more logical to look to deposits as an index of the degree of inflation in bank credit. The choice of loans and investments rather than of deposits can be defended practically by saying that after all it makes little difference. The two upper curves on Chart i support this conclusion. Thus, in the period under discussion the movements of total deposits of all member banks have been essentially similar to those for total loans and investments. A more pronounced seasonal movement in the deposits curve makes the resemblance somewhat less apparent than it otherwise would be. Hence, one objection to the use of deposits as a measure of credit expansion is that their significant movements are partly obscured by their

BEFORE we consider the varying advances achieved by various classes of industry since I9I9, it is useful and interesting to review the broad economic aspects of the period through which we have been passing. From our study of the cyclical fluctuations during the past sixty years, we have learned that economic data for that time can not be analyzed as a homogeneous whole. We find that there are certain periods which have been characterized by cyclical swings of great amplitude and much irregularity. There are other periods in which the ups and downs of business have been moderate, but, nevertheless, well defined. This distinction is clearly apparent in the fluctuations of the rates on prime commercial paper from i866 to I9271. During the reconstruction period from i866 to I873, the far reaching after-effects of the Civil War brought about extreme fluctuations in the rates on commercial paper. After a period of relatively narrow fluctuations, there emerged between I890 and I899 another interval characterized by wider variations, when the usual cyclical movements were greatly intensified by the Sherman Silver Purchase Act, by the menace of the free silver episode, and by the outbreak of the Spanish-American War. On the other hand, there were two long intervals in the sixty years under examination when money rates were virtually free from such extreme movements. From I875 to I890 and again from I900 to I9I3, there were periods during which the economic mechanism, having outgrown the influence of the tremendous disturbing forces which immediately preceded, and not being subjected for any considerable interval to the pressure of unusual new elements, settled down to a more stable and regular type of oscillation. The outbreak of the war in I9I4, however, ushered in another period featured by wide movements. Indeed, the war years were so dominated by military demands that critical economic analysis of this period is hindered by many obstacles. It will be noted, however, that during the war ancl post-war years, money rates have not exhibited the same degree of irregular month to month fluctuation which had characterized previous comparable periods. This reflects the influence of the federal reserve system. During I9I9-27, there are new and important elements in the economic situation, for which allowance must be made before one applies the methods of analysis suitable for such a period as I903-I3. The business situation in the United States has been profoundly influenced by the march of post-war developments in Europe, which brought financial upheaval and demoralization of markets. It has become increasingly evident that the United States is not an isolated self-sufficient nation, but, on the contrary, is affected materially by international developments. The fact that our country now has the greatest accumulation of gold in modern times serves to explain certain unusual phases in postwar business conditions. Furthermore, there have been substantial changes in the standard of living in this country, as well as in buying habits. These changes in the standard of living have been of such order as to have important effects on the usefulness of indexes of prices. Available wholesale price indexes are heavily weighted with data for staple basic commodities, and fail to measure the price movements of many of those things which people want to buy. People will deprive themselves in a variety of ways so that they may have automobiles, radios, fur coats, ultra-modern apartments, and other goods of the luxury class. This, then, means that price indexes fail to register adequately the price changes for articles people most desire to buy. It would be possible to cite many additional reasons to show why the period I9I9-27 has been an unusual one, but such enumeration is unnecessary to indicate that the injection of new elements into the compound we call the business situation has necessitated a revised point of

A,NALYSIS of business conditions in the I 2 federal reserve districts, as shown by the fluctuations in the volume of check payments (bank debits) since the beginning of I9I9, supports the following conclusions: (I) Business in the individual districts usually fluctuates in sympathy with that in the United States as a whole. There are no systematic differences in either the timing or nature of the business fluctuations among the various federal reserve (listricts, after due allowance has been made for varying seasonal movements and trends. Such differences as do appear are clearly less significant than the fundamental similarity in the broader movements. This condition is indicative of the close economic interrelationship of the several areas of our country. (2) Substantial improvement has been taking place in agricultural conditions in recent years. This is clearly reflected in the figures for the primarily agricultural districts, notably the Kansas City and Dallas districts. The sharpest recent movement is to be found in the Minneapolis district, where the marketing of a large spring wheat crop in I927 has been clearly reflected in the figures for debits. The Kansas City and Dallas districts exhibit a more steady gain, and have advanced materially above their I924 levels. (3) The recurrent brief periods of expansion, recession, and renewed expansion are less marked in bank debits than in basic production. This condition is explained by the fact that fluctuations in such production, while important, do not represent the movements of general business. Bank debits, on the other hand, constitute an extremely representative measure of the complex of activities included under the term general business. Production of consumption goods, wholesale and retail trade, construction of buildings and engineering projects, and agriculture these and all other forms of economic activity have a share in making up the total of check transactions. Thus, while production indexes have moved sharply during these intermediate movements, it seems probable that the narrower movements of total debits depict more accurately the course of general business over the past few years. Except in those districts which are primarily agricultural, the several districts contain such a diversity of economic interests that the volume of check transactions is relatively insensitive to changes in any one line of activity. There are, however, some instances (notably the Cleveland district, where the iron and steel trade is of such great importance) in which sharp changes in the pace of basic industry are reflected in the figures for debits. These conclusions are based upon adjusted relatives for bank debits which appear on Charts 3 and 5 and in Table 4. Conditions in the various federal reserve districts are discussed in the following sections and a map of the I2 districts appears on page I46. A full description of the actual data and the statistical methods employed in adjusting the figures for irregularities of the calendar, trend, and seasonal variation is given in the section on data and methods,